Monopolies Commission's Report (Hard Fibre Cordage) (Hansard, 8 June 1956)

§ Mr. P. Thorneycroft

The report was published today.

The Monopolies and Restrictive Practices Commission find that the conditions to which the Monopolies and 80W Restrictive Practices (Inquiry and Control) Act, 1948, applies prevail as regards the supply of hard fibre cordage, since the members of the Hard Fibre Cordage Federation, together with certain other suppliers, supply more than one-third (and in fact nearly all) of the hard fibre cordage supplied in the United Kingdom and so conduct their affairs as to restrict competition in connection with its production and supply.

The Commission's principal conclusions and recommendations are:—

(1) The Federation's common price system operates and may be expected to operate against the public interest, and should be brought to an end.
(2) The Federation's arrangements for discounts to listed dealers, for aggregated quantity rebates, for resale price maintenance, and for exclusive dealing support the common price system but may also be expected to operate against the public interest in conditions of price competition; they should be brought to an end.
(3) The Federation's arrangements for controlling the prices at which hard fibre cordage imported from the Irish Republic and St. Helena arc sold in this country, and for preventing or discouraging imports from some sources operate and may be expected to operate against the public interest. The agreements and arrangements with Irish Ropes Ltd. and the Belgian and Dutch manufacturers affect exports as well as supply in the home market and the Commission make no recommendations about them. The Commission recommend that, if the members of the Federation continue to handle cordage imported from St. Helena, they should be free to determine their selling prices individually.
(4) For the reasons given in (2) and (3) above, the agreement with the National Association of Rope and Twine Merchants, by which its members are allowed a special discount and aggregated quantity rebates and undertake not to buy foreign packing cords and twines, operates and may be expected to operate against the public interest, and should be brought to an end.
(5) Other Federation arrangements which operate against the public interest are:

(i) the prohibition on the manufacture and sale of any manila trawl twine better than the pre-war "second quality" twine;
(ii) the prohibition on the sale of cords and twines made from waste fibre;
(iii) the control of prices of roping yarn;
(iv) the prohibition on spinning on commission for non-members of the Federation;
(v) the obligation to charge delivered instead of ex works prices for certain kinds of cordage.

(6) The Federation's arrangements governing the sizes and runnages of cordage and the breaking strains to be quoted operate against the public interest in so far as they are obligatory, but it would not be against the public interest for the Federation to issue a recommended code of practice.
(7) The pool and quota scheme in which most members of the Federation participate operates and may be expected to operate against the public interest, and should be brought to an end.

So far as action on the report is concerned, as indicated during the Second Reading debate on the Restrictive Trade Practices Bill, the Government do not propose to take action on matters which will be subject to the jurisdiction of the proposed Restrictive Practices Court.