The UK's e-tail industry body has already made a complaint to
the Office of Fair Trading (OFT), arguing that this manufacturer is
depriving internet shoppers from getting competitive prices for its
products.
If it has not restored fair trading terms to all IMRG Members by
the end of National Consumer Week (which runs from 31st
October to 4th November), it will be named and its
illicit and anti-competitive trading practices will be exposed.
The IMRG accuses the scheme, known as Dual Pricing, of
deliberately making dealers who sell online uncompetitive. It says
it is killing their trade, thereby stifling competition and
introducing the probability of price inflation.
The scheme appears to "reward" bricks-and-mortar retailers for
having physical shops, according to the group, which has also
raised the issue with a senior European Commission representative.
"This scheme is either illegal or should be," said the unidentified
figure.
The argument for Dual Pricing is that it costs more to run a
physical shop than it does to run a virtual shop. The IMRG says
this is neither true nor relevant: The costs of running a virtual
shop properly – with rich information, high stock holding levels,
convenient delivery options and first-rate customer service – are
as high if not higher than those of a conventional retail outlet,
it argues.
In a statement issued today, the IMRG argues that there is
therefore no compelling market or national economic reason to prop
up the bricks-and-mortar distribution channel if it is becoming
uncompetitive – "particularly through an anomalous
manufacturer-imposed subsidy."
The IMRG's CEO, James Roper, said: "This serious abuse by a
global brand of both its position and consumers' rights must be
stopped immediately."
He argues that 24 million British consumers have embraced
internet shopping and are collectively investing £6 billion a year
in PCs and internet connections that give them their own, personal
shopping environments – a High Street at home.
"These consumers are directly bearing many of the costs
previously carried by bricks-and-mortar shops," said Roper, "which
is a major reason for internet shopping prices being highly
competitive, so it is completely inappropriate to disadvantage them
through Dual Pricing."
The IMRG has asked the OFT to "stamp down" on the scheme before
it is copied by other manufacturers and adopted by other
sectors.
The RNIB's Digital Policy Development Manager, Julie Howell,
pointed out that for many disabled people, popping to the shops
just isn't an option. "The advent of the web has made the simple
act of shopping, that so many of us take for granted, possible for
increasing numbers of disabled people," she said, expressing alarm
at the news that disabled people might be forced to pay more for
goods purchased online.
Roper points out that thing had been getting better. "Britain's
high street used to be woefully uncompetitive and anticompetitive,"
he said. "A few years ago, government intervention ended the
ultimate mechanism for stifling competition – Recommended Retail
Prices – but the other main problem remained: there was not enough
competition."
The internet changed all that, he says. But the IMRG says it
will not tolerate rogue trading countermeasures that threaten the
e-tail industry. It vowed to take all necessary steps to ensure
they are stamped out whenever they are discovered.
The deadline for the Dual Pricing manufacturer expires at noon
on 7th November.
