MMC investigated perfume house meetings

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EVIDENCE that the UK heads of Yves St Laurent, Givenchy, Calvin Klein and other luxury perfume houses met privately under the auspices of an obscure West Country-based organisation has been under investigation by the Monopolies and Mergers Commission as part of its inquiry into uncompetitive practices in the fragrance industry.

The MMC's report on the industry landed on the desk of Neil Hamilton, the minister for corporate affairs at the Department of Trade and Industry, last week. Mr Hamilton is expected to publish the document and make recommendations within two months.

The MMC is understood to have established that ad hoc meetings between senior fragrance industry employees took place under the auspices of an organisation called the Fragrance and Beauty Association, a company formed in March 1989 and based at the Somerset home of James Lange, the former managing director of the UK arm of Christian Dior.

Superdrug, the Kingfisher-owned toiletries chain, claims the fragrance houses have been acting in concert to prevent it selling luxury perfumes at a discount. It sells fragrances at up to 30 per cent off recommended prices in 45 shops by sourcing 'grey market' supplies from wholesalers ready to breach the selective distribution deals signed with the perfume houses.

According to documents at Companies House, the directors of the FBA as of 9 June 1992 included: Lynne Bonson, managing director of Calvin Klein; David Marsh, managing director of Yves St Laurent; Peter Norman, managing director of Parfums Givenchy; Maurice Douek, managing director of Jean Patou; Anthony Bottomley, managing director of Hermes; and Mr Lange.

The company is based at Mr Lange's home in Limington, near Yeovil. The directors' report for 1991 said the company was established 'to provide a statistical service for the members and to provide a periodic forum for discussion'. It has also financed a prize for journalists writing about perfumes.

A spokesman for Superdrug said: 'We're aware of the existence of the FBA. It seems to be a very high-powered bunch of people just to be gathering a few statistics and running a journalism award.'

Mr Lange said: 'We are a group of companies that come together to produce statistics. That is the be-all and end-all of it.'

The industry already has a trade association in the form of the Cosmetic, Toiletry and Perfume Association. Marion Kelly, the director, said neither the CSPA nor the FBA would have discussed pricing or distribution. 'They (the FBA) are an obvious target for accusations of that nature.'

She said she made sure the CTPA's perfumery working group discussed only non-commercial matters. She was always last to leave the room after meetings of the committee. 'We've been very careful on that.'

The fragrance houses have refused to supply Superdrug, claiming its shops are not suitable for luxury perfumes. Last year, some of them threatened to withdraw advertising from publishers who accepted Superdrug advertising.

(Photograph omitted)