The Campaign For Cheaper CDs: Sales of compact discs increase as prices are cut
Sunday 19 July 1992
The Independent on Sunday has been campaigning for cheaper CDs since January. On 10 May, our Complete Guide to Cheaper CDs named independent shops selling them at lower prices than chainstores.
Nigel Griffiths, Labour's consumer affairs spokesman, wrote to Sir Bryan Carsberg, the new director-general of the OFT, requesting action on CD prices. Sir Bryan said he would review the evidence personally before deciding if there was a case for additional work and perhaps formal regulatory action.
Mr Griffiths told the Independent on Sunday: 'Your great achievement is that we will never see CD prices shoot up again. There is a consumer revolt. Previously people thought that if you wanted a CD you had to pay pounds 12.50. People used to accept prices. Now they don't. You have changed buying habits.'
'People are definitely more price-conscious now,' said Paul Assirati, proprietor of See These record store in Norwich. 'I've had new customers who have seen our name in the paper. They said they had previously been paying pounds 14 at HMV and Our Price.'
The total volume of music sales has declined over the past year: singles are down by 9 per cent and albums by 4 per cent. But some discount shops reported improved takings: 'We are selling considerably more than last year and one of the reasons is price. We are by far the cheapest shop in Doncaster,' said the manager of Track Records.
At Bee Bees in Essex, where the top CD price is pounds 10.99, sales are rising. 'We are definitely selling more units because our prices are lower,' said the manageress. 'We must have taken business away from the big shops.'
In recent months, stores such as Our Price, HMV and Woolworths - which deny that CDs are overpriced - have run promotions offering selected CDs at lower prices.
In April, after a 15-month inquiry, the OFT concluded that CD prices were too high. But the case was not referred to the Monopolies and Mergers Commission because there was insufficient evidence of collusion between record companies and retailers.
Sir Gordon Borrie, then director-general, said that CD prices had 'settled around a level which, on the whole, the market appears to bear'.
Sir Bryan, his successor, comes to the OFT from Oftel, the body which monitors the telecommunications industry. There, his parting shot was to demand, successfully, that British Telecom cut its profits. Mr Griffiths said: 'He can get results.'
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