Electrical makers blamed for high costs

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The Independent Online
Customers are being overcharged for electrical goods ranging from televisions to washing machines because multinational manufacturers want to maintain profits and add cachet to their brands, according to a report published today.

Large retail chains such as Dixons and those run by the regional electricity companies are exonerated from blame by Verdict, the retail consultancy, but it says consumers are being denied choice by the dominance of manufacturers. This is preventing the growth of a discount retail sector to match that in the US, it claims.

The report comes days after the completion of a Monopolies and Mergers Commission report into the pricing and supply of electrical goods, expected to be published in the next few weeks.

Although not named in the report, multinational groups like Sony, Panasonic and Philips have been put into the firing line by Verdict some three years after being the target of similar criticism.

Richard Perks, one of the consultants on the report, said: "What we are saying is the problems of the industry are due to the dominant influence of manufacturers, not because of any collusion by retailers themselves, which one might believe given the uniformity of their prices.

"What we think manufacturers are doing is supporting smaller retailers and not giving the bigger retailers the scale of support you would expect, given their buying advantage."

He said it was right that retailers charged for advice and other extras, but there was also a place for a discount sector where people could buy goods off the shelf at low prices.

The report comes two years after Nurdin & Peacock, the cash-and-carry group, was forced to close its fledgling Cargo Club discount store chain after just a year of operation. It blamed tighter planning regulations, but Nurdin, since taken over by Booker, had also complained to the Office of Fair Trading after Sony, Panasonic, JVC and Toshiba refused to supply electrical goods to the group.

Mr Perks also said the role of the independent retailer was declining "No matter how much the manufacturers may do to support the smaller stores, it's virtually impossible to sell on the high street because the margins are so small."