§ Mr. Robert Taylor
asked the Secretary of State for Employment and Productivity whether he will make a statement on the Report of the Monopolies Commission on the supply of metal containers.
§ Mr. Bryan
The Report was published this morning. The Commission has found that monopoly conditions as defined in the legislation prevail in the supply of metal containers. One supplier, Metal Box, has more than one-third of the market.
The Commission found that Metal Box had a good record in relation to capacity and the deployment of plant, efficiency and innovation. In the Commission's view the market conditions themselves compel Metal Box on the whole to act fairly and efficiently, since the company is subject to actual and potential competition from customers who make or are capable of making some of their own containers. The Commission therefore found that the monopoly conditions as such did not operate against the public interest.
The Commission did find, however, that specific things done by Metal Box as a result or for the purpose of preserving the monopoly conditions were against the public interest. These practices relate to the arrangements for the supply of closing machines to customers and of spares and service for the machines; to the discount and special pricing arrangements for opentop cans in so far as these involve commitments by customers to buy the whole or a specified proportion of their requirements from Metal Box; to the long-term agreements with customers for the sale and purchase of open-top cans of either indefinite duration or of more than two years; and to 189W its "incentive" discount scheme for aerosols.
As remedies, the Commission recommend that Metal Box should not re-introduce any exclusive conditions on the supply of closing machines, should abolish the rebate allowed on purchases of cans to hirers of these machines, and should in future maintain its arrangements for supplying these machines on a profitable basis. They also recommend that the company should, as soon as possible, terminate its agreements and arrangements involving commitments by customers to buy the whole or a specified proportion of their requirements from the company; that in future in so far as the company seeks forward orders it should do so for specified quantities only; and that it should not make any price concession in recognition of the fact that customers have bought the whole or a specified proportion of their requirements from Metal Box. The Commission also recommend that Metal Box should, as soon as possible, terminate its agreements and arrangements with customers for the sale and purchase of open top cans in so far as these are of indefinite duration or cover a period of more than two years and should not in future enter into any agreement or understanding with a customer for the sale and purchase of cans which is of indefinite duration or covers a period of more than two years. Finally, the Commission recommend that the company should as soon as possible terminate its "incentive" discount scheme for aerosols and should not in future introduce any similar schemes.
The Commission have conducted a useful and thorough inquiry. I accept the report in principle and my Department will discuss with the company the implementation of the recommendations made by the Commission.