Electric Lamp Industry (Monopolies Commission's Report) (Hansard, 19 May 1952)

§ Mr. Sandys

I have considered the Report of the Monopolies Commission on the supply of electric lamps together with the observations submitted by the Electric Lamp Manufacturers' Association (E.L.M.A.).The Commission summarised their recommendations as follows:

(i) that E.L.M.A. should undertake that members who sell lamp components (other than patented components and ready-coiled filaments) will make them equally available to members and non-members at prices which shall not be higher to non-members than to members;
(ii) that, if the working of the new patent policy results in an appreciable reduction of the degree of competition to which E.L.M.A. is subjected, the whole question should be examined afresh;
(iii) that E.L.M.A. members should give an assurance that the Controlled Companies will continue to provide a measure of competition as suppliers of cheap lamps and that they will not be used as fighting companies;
(iv) that the sales quota system should be brought to an end;
(v) that E.L.M.A.'s rules about Type B lamps should be altered to remove quantity and quality restrictions;
(vi) that the arrangements for exclusive dealing and aggregation of quantity rebates should be brought to an end;
(vii) that payments to associations of distributors should be brought to an end;
(viii) that the enforcement of resale price maintenance by means of the collective sanctions of fines and the Stop List should be brought to an end;
(ix) that E.L.M.A.'s Rules should be altered to permit other distributors as well as cooperative societies to give 'dividends'."

Furthermore the Commission expressed the opinion that the continuance of the practice of fixing common manufacturers' prices should be subject to two conditions, namely:

(a) that the E.L.M.A. members should take steps to ensure that the system of exchange of technical knowledge extends to all manufacturers within the system of common prices; and
(b) that the level of prices fixed by E.L.M.A. should be reasonable.

The Government are in agreement with recommendations Nos. (i), (ii), (iii), (iv), (v), (vii), (viii) and (ix) and with the two conditions which the Commission laid down for the continuance of the system of common prices.

With regard to recommendation No. (vi), the Government agree that the arrangements for exclusive dealing should be brought to an end, but they propose for the present to reserve judgment on the recommendation that aggregated rebates should be abolished, in order to give time to ascertain whether or not the continuance of this arrangement will tend to impair the effects of the abolition of exclusive dealing. In adopting this course, regard has been had to the Commission's view that the practice of fixing common manufacturers' selling prices, with which the system of aggregated rebates is associated, facilitates the exchange of technical knowledge within the industry. Account has also been taken of the possibility that the abolition of aggregation might adversely affect the position of the smaller manufacturers in the Association.

The position has been fully discussed with the Electric Lamp Manufacturers' Association, and they have given me assurances that they are taking action to bring their arrangements into conformity with the Government's conclusions.