Unfair Discounts (Hansard, 2 May 1984)

§ 11. Mr. Corbett
asked the Secretary of State for Trade and Industry when he expects to receive the report from the Office of Fair Trading on unfair discounts.

§ Mr. Fletcher
The Director General of Fair Trading is finalising the terms of reference for his fact-finding exercise to update some of the information of the Monopolies and Mergers Commission report of 1981 on discounts to retailers. He is unlikely to have the full results of the exercise before the end of this year.

§ Mr. Corbett
Will the Minister acknowledge the problems that are faced by small independent grocers in rural and inner city areas, in that they receive far smaller discounts than the multiples and, to that extent, trade at a disadvantage? Will he encourage the OFT to ensure that the multiples fully pass on to the consumer the benefits of their bigger discounts?

§ Mr. Fletcher
The concern expressed to the Director General is that the large multiple retailers may be abusing their monopoly power. So far no evidence of that has been presented to me, but the Director General, in pursuance of his powers under the 1973 Act, is updating the 1981 Monopolies and Mergers Commission report to see whether any evidence is available. The food manufacturers and others have been invited to give evidence to him so that all the facts may be available in considering the matter. The Secretary of State for the Environment is making a special study of the problems affecting the rural areas and the elderly.

§ Mr. Grylls
Will my hon. Friend do his best to ensure that we do not have another whitewash report on unfair practices from the commission? Will he recognise that the organisation representing smaller traders is looking to the Government to remove the tilt against them which undoubtedly exists because of the unfair discounts? If action is not taken by the Government it will not be taken by anyone.

§ Mr. Fletcher
With respect, my hon. Friend is presuming that there are unfair practices. If he has any evidence of these the Director General will be very pleased to receive it.

§ Mr. Forth
May I ask my hon. Friend to tread carefully in this matter, as we are in great danger of tinkering with the basic laws of supply and demand? The consumer in this country benefits probably from the most efficient retailing system in the world. If we tread too heavily in this difficult area we are in danger of acting contrary to the interests of the consumer in a clumsy backhanded effort to put right what is not wrong.

§ Mr. Fletcher
I agree with my hon. Friend. There is no evidence that consumers are dissatisfied with the present trends in retail distribution. As he says, the retail distribution system in this country is one of the most efficient in the world.

§ Mr. Gould
Does not the disquiet felt by many people, and also by the grocery trade, on this subject show that unrestrained competition can destroy the free market that it is supposed to sustain? Does this not mean that the Minister could now take the opportunity of rejecting the view advanced by the Adam Smith Institute, and to some degree by the right hon. Member for Taunton (Mr. du Cann), that competition alone is all that is needed to deal with problems of fairness and consumer protection?

§ Mr. Fletcher
I remind the hon. Gentleman that the Fair Trading Act was passed in 1973 during the time of a Conservative Government and that the Director General, as I have indicated in my reply, is carrying out his duties with the full support of the Government.