Adverts for cheap perfume 'blocked'
Monday 05 October 1992
Superdrug, which sells perfumes such as Chanel and Yves St Laurent at 15 of its 670 shops in Britain at discounts of up to one third, says that the advertising ban is part of an attempt to keep prices artificially high.
Four British magazine publishers have refused to carry a pounds 250,000 advertising campaign promoting discounted perfumes, a decision described by Superdrug as 'a clear case of pressure being applied by the perfume companies'.
The advertisments were turned down by Conde Nast, which publishes Vogue, IPC, the National Magazine Company and Emap. They were part of a plan to boost Superdrug's pounds 10m annual perfume sales.
Bill Jones, a spokesman for Superdrug, said yesterday that the publishers had not openly admitted that they had been pressurised by the perfume houses into refusing the advertisements, but the company was certain that this was what had happened.
He said: 'IPC wrote to our advertising agency saying 'we have frequently been party to our clients' views that this (price cutting) is the single biggest threat to their profitability and long-term growth.' '
Stephen Quinn, publishing director of Vogue, told a Sunday newspaper that the decision to refuse the advertisements had been 'purely commercial'.
He said: 'Only a fool would accept cut-price advertising from Superdrug for a magazine like Vogue. We have a long-standing relationship with fragrance houses like Chanel and Yves St Laurent, who are constantly telling us how disturbed they are by this type of discounting.'
The other publishers which refused Superdrug's advertisments were not available for comment yesterday. The row is the latest round in a battle between the company and the perfume manufacturers which has been growing for months. The perfume companies have refused to supply Superdrug with their products, which has led to the high street chain making a complaint to the Office of Fair Trading.
Superdrug, owned by the Kingfisher group, which also includes Woolworth's, Comet and B&Q, at present has to buy its perfume on the 'grey market' because of the manufacturers' refusal to supply its shops.
The 'grey market' mainly comprises wholesalers on the Continent and in the United States. The disadvantage from Superdrug's point of view is that supplies cannot be guaranteed from this source.
The perfume manufacturers are refusing to sell to Superdrug partly because they do not like its discount policy and partly because they feel that its shops do not have the right atmosphere and style for their products.
Superdrug says that the manufacturers are trying to protect excessive profit margins and cuts the price of many leading makes by up to a third.
The biggest reduction, though, is on an eau de toilette which normally sells at pounds 47 a bottle and costs pounds 24.95 at Superdrug.
A decision from the Office of Fair Trading on what action to take over Superdrug's complaint against the perfume companies is expected within the next few weeks.
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