The Office of Fair Trading (OFT) has rejected Government calls for further investigation into the prices charged by pubs and restaurants for soft drinks.
The Government asked the OFT to look into soft drinks prices last month, after its own inquiry found pubs and restaurants were charging three times as much as off-licences and supermarkets for these products.
But the OFT today told consumer affairs minister Kim Howells it did not believe the issue was one of unfair competition.
"The number of complaints we have received has been very low," a spokesman said.
"Reports have said prices in supermarkets are cheaper but the costs faced by supermarkets are significantly different."
The higher costs incurred by restaurants, bars and pubs translated themselves into higher prices.
"We have found no case for further action," the spokesman said.
The Department of Trade and Industry (DTI) said this afternoon it was writing back to the OFT to ask it to re-consider.
It says it has received almost 50 complaints about soft drinks in the past six months and would be enclosing details with its reply.
The DTI is still working closely with the licensed trade to make sure soft drinks prices are clearly displayed.
"Consumers have got into a culture of not really asking the price of soft drinks in pubs and making prices transparent will make a difference," said a spokesman for the DTI.
A standard measure for soft drinks is also being considered.
The OFT does agree with the Government that prices should be more clearly displayed.