Plasterboard (Hansard, 18 January 1978)

§ Mr. John Fraser

On 6th December last year I announced to the House that, after negotiations with the Director General of Fair Trading, BPB Industries, which, through its subsidiary, British Gypsum, has a complete monopoly in the spply of plasterboard in the United Kingdom, had submitted undertakings to my right hon. Friend, in respect of both these recommendations which concern the introduction of differential delivered prices and direct customer collections. However, because of the need to avoid any possible conflict with price controls, they could not be implemented until discussions between the company and the Price Commission had been completed. These discussions have now been concluded and the new pricing system will take effect on 1st March 1978. Between now and that date British Gypsum will be taking steps to ensure that its customers are made aware of what will be major changes to its pricing and trading policies.

In its first recommendation, the Monopolies Commission advocated that BPB should abandon its existing system of uniform delivered prices and replace it with a system of differential delivered prices for each type and load of plasterboard which would more accurately reflect the actual cost of delivery to each customer. The company has now undertaken to charge for any consignment of plasterboard delivered to a customer in Great Britain a price exceeding the ex-works price by an amount calculated to enable the company to recoup the average cost of delivering such a consignment to any place within the zone where delivery is made.

For the purposes of this undertaking "zone" means (a) in relation to England and Wales the relevant metropolitan or non-metropolitan county except that Mid-Glamorgan, South Glamorgan and West Glamorgan should be regarded as one zone; and (b) in relation to Scotland 226W the relevant region, except that Dumfries and Galloway shall comprise two zones—Eastern and Western—Highland shall comprise two zones—Northern and Southern—and Strathclyde shall comprise three zones—Northern, Central and Southern.

The Commission's second recommendation was that BPB should allow collection by any customer, including a merchant's customer, from the firm's works at ex-works prices plus reasonable loading charges and subject to reasonable advance notice being given of date and time of collection of a specified minimum load. In accordance with this recommendation, BPB has now undertaken to supply plasterboard to its customers for collection at all of its works in Great Britain.

However, the company's undertaking does not require it to make its plasterboard available for collection (a) at any works where plasterboard of the type sought by the customer is not manufactured; (b) in quantities of less than 20 tonnes; (c) other than during a specified period—of at least six hours—between 9 a.m. and 6 p.m. on each ordinary working day, Monday to Friday inclusive; (d) to persons not presenting a flat-bed open-sided vehicle of at least 20 tonnes carrying capacity suitable for fork-lift loading; and (e) to persons whom the company is unwilling to supply for reasons unconnected with the place of supply.

BPB has also undertaken not to differentiate in the prices charged for similar types and quantities of plasterboard supplied for collection at different works and will not charge for any plasterboard so supplied a price intended to subsidise the cost of transporting plasterboard to customers to whom the company delivers supplies; this, however, shall not preclude the company from imposing a loading charge not exceeding 0.5 per cent. of the ex-works price for plasterboard supplied for collection at its works.

I am confident that these undertakings will remedy the adverse effects on the public interest identified by the Monopolies Commission in its report, but, in order to ensure this, I am arranging for the carrying out of the undertakings to be kept under review. Copies of the undertakings will be placed in the Library.