Birds Eye Wall's referred to MMC over supply deals
Tuesday 23 December 1997
The decision to refer the issue to the MMC was taken by the Office of Fair Trading which said the existing structure of the distribution system restricts competition between wholesalers and between ice cream manufacturers.
Birds Eye's delivers its wrapped ice-creams to shops by a network of 32 exclusive operators, known as concessionaires. They undertake not to distribute other makes of ice-cream. The OFT said rival wholesalers, if supplied, received ice cream on less favourable terms. It said the existing structure would restrict choice and possibly lead to consumers paying higher prices.
John Bridgeman, Director-general of fair trading, said: "At the end of the day, it is consumers who lose out if Wall's distribution policy restricts the choice of ice creams in a shop, or makes it difficult for manufacturers to enter or expand in the market."
The MMC said the practices under investigation would include:
- the refusal to supply wrapped ice-cream to wholesalers who are not dedicated distributors, unless it is on less favourable terms;
- the granting of discounts to retailers who buy Wall's ice-cream from dedicated distributors but not to those who buy it from other suppliers.
Mr Bridgeman said: "Wall's concessionaires have an excellent reputation with retailers. But there are other wholesalers who would like to provide just as good a service." He said the current system operated by Wall's encouraged retailers to buy ice-cream from the Wall's dedicated wholesalers even if it meant they could not get other brands of ice-cream
The OFT said it would have liked Wall's to have agreed to give equal terms to concessionaires and independent wholesalers for doing the same business. However, it said that though Wall's had been willing to make some concessions they did not meet all the OFT's concerns.
Birds Eye Wall's said it welcomed the MMC decision but did not agree with the OFT that its system restricts consumer choice. It said it has been in discussions with the OFT since February 1996 over various aspects of its distribution systems and planned to introduce changes in 1998.
Tony Pearce, the company's sales director said: "We look forward to the new enquiry and are confident that these new proposals, which amount to a restructuring of our terms and discounts will put beyond doubt the fairness of the system."
The latest move by the OFT follows an MMC inquiry into freezer exclusivity in the ice- cream trade in 1994. That investigation centred on the practice of Mars, Wall's and others of giving freezers to retailers as long as the shop only uses them for that manufacturer's products. The MMC found that the practice was not against the public interest.
Unilever shares melted slightly on the news, closing down 3.25p to 486.75p.
- 1 Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
- 2 What supermodels really think about posing in the nude
- 3 North Korean defector flees to Finland 'with evidence of chemical testing on humans'
- 4 Black teen in critical condition after store employee 'shoots him for stealing 79-cent pack of cookies'
- 5 Swedish minister gives strongest case yet on why EU should stop turning away asylum seekers
Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
Greece debt crisis explainer: A history of just how the country landed itself in such a mess
North Korean defector flees to Finland 'with evidence of chemical testing on humans'
Swedish minister gives strongest case yet on why EU should stop turning away asylum seekers
Isis schoolgirl Amira Abase who fled London to join terrorists in Syria mocks victims of Tunisia massacre
More Britons believe that multiculturalism makes the country worse - not better, says poll
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
iJobs Money & Business
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...
£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...
£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....
£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...