§ Mr. Cartwright
asked the Secretary of State for Prices and Consumer Protection when he expects to publish the report of the Monopolies and Mergers Commission on the supply in the United Kingdom of frozen foodstuffs for human consumption.
§ Mr. John Fraser
The report is being published today. The Commission found that a monopoly situation existed in the supply of frozen foodstuffs, in that Unilever Limited supplied at least one quarter of all the reference goods, mainly through its Birds Eye subsidiary. The Commission reported that apart from Birds Eye, the market leader, there were two other major processors of frozen foods, Ross Foods (Imperial Group) and Findus (Nestle), each of which had approximately 11 per cent. of the market for reference goods. There were also some 150 other processors of frozen foods. The Commission found Birds Eye's efficiency and innovative record to be above average and they made no adverse comment on the company's general level of prices. Profits were not found to be excessive, and the Commission concluded that Birds Eye's price leadership in the retail trade had not been exploited in a manner calling for any adverse comment.
The Commission criticised Birds Eye's practice of giving discounts to retailers for reserving space in freezer cabinets as steps taken for exploiting or maintaining its monopoly position. They held that the practice was against the public interest and recommended that Birds Eye should be debarred from giving such discounts in future—but only if other important processors of reference frozen foods giving these discounts also undertook to discontinue this practice. The Commission expressed some reservations about other aspects of Birds Eye's discount procedure—which the company was proposing to revise—but reached no adverse conclusions on them.
The Commission regarded the loan of freezer cabinets for the exclusive stocking of Birds Eye's products as restrictive of competition, but found it unnecessary to make any recommendation as the com- 166W pany had said that its policy was not to make further loans of cabinets.
The Commission was concerned that Birds Eye should not attempt to run County Fair—a subsidiary set up by Birds Eye primarily to compete in the home freezer trade—at a significant loss over an extended period and noted Birds Eye's statement that the County Fair operation was expected to break even in the near future.
The Commission did not consider that Birds Eye's methods of procurement of raw materials, or its exclusive wholesaling arrangements, were against the public interest.
In the light of this report, my right hon. Friend is asking the Director General of Fair Trading to discuss with Birds Eye and other important suppliers the implementation of the Commission's recommendation on discounts for reserving freezer cabinet space. He is also asking the Director General to discuss Birds Eye's own plans for changes in its retrospective and other discount arrangements, with a view to securing a new discount structure of a sort likely to encourage competition and efficiency in distribution. Finally, he is asking the Director General to confirm that Birds Eye has stopped making loans of refrigerated cabinets to retailers, and to discuss with the company its plans to break even on its sales of County Fair products in the near future.