§ Mr. Alexanderasked the Secretary of State for Trade and Industry what action has been taken on the report of the Monopolies and Mergers Commission on the supply of contraceptive sheaths; and if he will make a statement.
§ Mr. Alexander FletcherThe Director General of Fair Trading has now completed the discussions with LRC Products Limited (LRC) which my right hon. and noble Friend the then Secretary of State for Trade invited him to undertake following publication of the report on 4 November 1982. As a result of these discussions LRC has given certain undertakings to my right hon. Friend.
In their report the Commission found that a monopoly situation existed in favour of LRC Products and concluded that it was likely to result in prices for comtraceptive sheaths becomimg excessive. They therefore recommended that LRC should give an undertaking to limit price increases by relation to a composite index of their costs. They also recommended that LRC should provide the Director General of Fair Trading annually with details of sales, price changes and other information to enable him to monitor the undertaking, and that the undertaking should be reviewed after five years.
Following publication of the report, the then Minister for Consumer Affairs asked the Director General to negotiate appropriate undertakings with LRC. I am now pleased to announce that my right hon. Friend has received and accepted undertakings from LRC in the following terms.
- (1) LRC Products Limited undertakes that the company will price its contraceptive sheaths with the objective that United
240 Kingdom average realised prices of these products—that is, the total United Kingdom sales of sheaths divided by the grossage — shall not increase above their level in the company's financial year 1981–1982 at a greater annual rate than 1.5 percentage points less than any percentage rise in a special index. - (2) LRC Products Limited undertakes that for the purpose of enabling undertaking (1) to be monitored the company will provide the Director General of Fair Trading not later than 30 June 1984 and at 12 monthly intervals thereafter with figures of the total United Kingdom net Sales of Sheaths by value and volume, and with details of price changes of each of its brands of sheaths as and when such changes are made.
- (3) LRC Products Limited undertakes that, to enable the undertaking to be reviewed at the special index referred to in undertaking (1) to be examined after five years or, if necessary, during that period, the company will provide the Director General of Fair Trading with such additional information as the Director General considers necessary.
We welcome these undertakings. My right hon. Friend considers them sufficient to remedy and prevent the adverse effects specified in the commission's report.