Leading Article: A funny smell from the scent counter

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FIVE YEARS ago, the Bic pens people hit on a brilliant idea. They asked perfume experts to make up scents almost identical to those of the famous brands in the department stores. The new liquids were then marketed in plain glass phials at a fraction of the price of their competitors. Unfortunately, it didn't work. The ancient Egyptians, Persians and Greeks may have paid kings' ransoms for rare and beautiful scents; modern Europeans were more interested in the bottles than their contents.

The story demonstrates the clout of the French and American designers whose brands drove Bic out of town. They package and advertise their products as assiduously as the makers of champagne or whisky; but they also limit where and how their bottled nectars may be sold. To become a perfume retailer, you have to answer a questionnaire, supply photographs of your staff, and promise not to taint the scent's image by selling it within 50 feet of a food counter. Joining the Garrick seems easy by comparison.

With some products, there is a case for such restrictions. In the car industry, for instance, this 'selective distribution' helps garages to provide good after-sales service. But scent bottles do not need to be brought back to the shop every 12,000 parties; the only justification for their selective distribution is to preserve the image itself.

Yesterday's Monopolies and Mergers Commission report was astonishing for two reasons. First, the commission failed to find any evidence to back up the claims by Tesco and Superdrug that the perfume houses unfairly dragged their feet in taking them on as retailers, and that pressure was put on glossy magazines to refuse Superdrug advertisements. Second, the commission swallowed the perfume houses' argument that it can be in the public interest to preserve a system which keeps prices artificially high.

The consumer may win in the end, however. Out-of-town retailers and discounters will undoubtedly keep asking perfume houses for supplies; and if they are consistently frustrated in the voluntary arbitration procedure that the MMC proposes, they will go back to Brussels to have the rules changed.

Meanwhile, consumers might like to reflect on the implications of the MMC's researches. In a bottle of scent whose recommended retail price is pounds 30, the contents themselves cost pounds 2 or less. The rest is distribution, wholesale and retail margins. Or if you prefer: self-esteem, image and snob value.

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