Tax-News.Com Archive

Sponsored by: PEARSE TRUST
Independent advice on corporate and trust structures

ARCHIVE ROOT | TODAY'S NEWS | LOWTAX

OFT Probes Price Differences For Online Retailers
by Robin Pilgrim, LawAndTax-News.com, London

17 November 2005

The UK's Office of Fair Trading (OFT) is investigating allegations that electronics manufacturers practice "dual pricing" when selling wholesale to high street retailers in the UK and their online counterparts, to the detriment of the latter.

Online retail industry body, the Interactive Media in Retailing Group (IMRG) has complained that online retailers are offered less competitive wholesale prices for electronic equipment, meaning that they are unable to compete with high street shops during crucial periods, such as in the run-up to Christmas.

However, manufacturers have argued that there is only one wholesale price, but that discounts are afforded to bricks-and-mortar shops based on commercial considerations, such as displaying the products.

In a statement released earlier this month which threatened to name "a major electrical consumer goods manufacturer" which had been employing dual pricing practices, IMRG's CEO, James Roper, commented that:

"This serious abuse by a global brand of both its position and consumers' rights must be stopped immediately. Twenty four million British consumers have embraced internet shopping. They are collectively investing £6 billion a year in PCs and internet connections that give them their own, personal shopping environments - their High Street at home."

"These consumers are directly bearing many of the costs previously carried by bricks-and-mortar shops, which is a major reason for internet shopping prices being highly competitive, so it is completely inappropriate to disadvantage them through dual pricing."

"IMRG has raised this as a matter of urgency with the Office of Fair Trading, and we are confident that we can rely on the Government, which has often proclaimed its commitment to 'making Britain the best place in the world to trade electronically', to stamp down on this unhelpful innovation before it is copied by other manufacturers and adopted by other sectors, with dire consequences for consumers and the UK economy."

It has been suggested by the UK media that the manufacturer in question is electronics giant Sony.

However, speaking to the BBC this week, Sony UK managing director, Steve Dowdle denied that a dual pricing system was in operation.

"Sony offers a common basic trade price to all resellers, online and offline. What is true is that Sony offers discounts to qualifying retailers, which benefit consumers," he explained, continuing:

"We supply retailers using a comprehensive set of commercial conditions that reward all dealers who add value to the brand proposition and purchasing experience. The commercial conditions recognise the different consumer experience and service that retailers offer to their consumers."

.

 


IMPORTANT NOTICE: TAX-NEWS.COM has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments. All materials on this site copyright TAX-NEWS.COM 1999 to 2007. Contact us for further information.