MPs seek Kalon monopoly inquiry

FORTY-NINE MPs are urging Michael Heseltine, President of the Board of Trade, to refer Kalon's hostile takeover bid for Manders, the paint maker, to the Monopolies and Mergers Commission.

MPs from both parties have signed an early day motion objecting to the pounds 100m bid because Kalon plans to cut 500 jobs.

The MPs, who include Harriet Harman and Marjorie Mowlam from the Labour side and Nicholas Budgen, a Tory - believe the MMC should look into the proposal because of its effect on the supply of own-label paint. Lord Callaghan, the former Labour prime minister, has also signed the motion.

The Office of Fair Trading is examining the issues raised but has yet to decide whether to recommend a referral to the commission.

The MPs are concerned that a merger would give Kalon control of 70 per cent of the own-label business.

They fear that it 'would leave many small retailers dependent on Kalon . . . and would threaten a reduction in competition'.

Mike Hennessy, Kalon's chief executive, said a referral was unlikely because own-label paint competed with branded lines such as Dulux and Crown.

Own-label suppliers also had to compete with continental rivals, he said.

Kalon also responded to concerns over jobs being lost in a merger. It said that the Wolverhampton-based Manders had stressed its commitment to cost- cutting in recent years and had a worse record in redundancies than Kalon.

(Photograph omitted)

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