§ Mr. Greenwayasked the Secretary of State for Trade when he expects to publish the report of the Monopolies 203W and Mergers Commission on the proposed merger between Compagnie Internationale Europcar and the short-term rental business of Godfrey Davis Limited.
§ Mrs. Sally OppenheimMy right hon. Friend received the report on 10 December 1980. It is being published today. The commission concluded unanimously that the proposed merger might be expected not to operate against the public interest.
The commission considered the effect which the merger might be expected to have on competition both in the supply of cars in the United Kingdom and in the short-term self-drive car rental market in the United Kingdom. It also considered the possible effects of the merger on employment.
The commission concluded that there was some possibility of anti-competitive conduct in the supply of cars in the United Kingdom but that the scale would be too small to have a significant impact on competition in that market. Competition for international rental reservations in particular might be expected to increase, and the availability of Europcar's larger financial resources might be expected to facilitate the development of Godfrey Davis/Europcar as a still stronger competitor than Godfrey Davis both in the United Kingdom and international markets. Although, in the commission's view, these advantages would be sufficient for Europcar and Renault—the parent company of Europcar—to ensure that the efficiency and competitiveness of GD/Europcar were maintained, it sought and obtained from Renault the following assurance in order to guard against one particular anti-competitive practice that might be pursued:
Regie Nationale des Usines Ranault (Renault) will not make or allow to be made by itself or any of its subsidiary or associated companies, dealers, concessionaires or any other person under its control any arrangements whereby the company operating the car rental business previously owned by Godfrey Davis Limited (merged company) would be able to obtain Renault vehicles or vehicle parts at prices or terms (including terms as to discounts, rebates, credit and repurchase arrangements) more favourable than those that could be obtained for transactions (of comparable size and made within a reasonable period of each other) by other vehicle rental operators or other customers in the United Kingdom. Further, Renault will make available to the appropriate authority in the United Kingdom such information as that authority may request to satisfy itself that the above assurance is being observed".The commission's other conclusions were that Renault's main competitors were unlikely to enter the car rental market if the merger went ahead, that the merger would not be against the interests of Godfrey Davis's employees, and that, though some slight loss of sales by domestic car manufacturers might occur, it was not possible to point to any specific impact on employment resulting from this. It also thought that there was an enhanced prospect of the further expansion of Godfrey Davis's present network, which could provide a considerable number of new jobs.
As a result of the commission's finding there are no powers to prevent the merger under the Fair Trading Act 1973. I am, however, asking the director general to discuss with Renault the assurance which it gave to the commission; the director general has powers under the Competition Act 1980 to initiate an investigation, if in the future Renault engages in conduct which appears to him to be anti-competitive.