HC Deb 13 July 1983 vol 45 cc361-2W
Mr. Moynihan

asked the Secretary of State for Trade and Industry when the report of the Monopolies and Mergers Commission on the supply of holiday caravans on licensed sites in Northern Ireland is to be published; and if he will make a statement.

Mr. Alexander Fletcher

The report is published today.

The commission found that no business enjoyed a scale monopoly in the supply of pitches, but a complex monopoly existed in favour of those businesses which combined dealing in caravans with operating caravan sites and sought to link the provision of sites with sales of caravan, by reserving pitches preferentially for caravan purchasers or by requiring caravan owners already occupying a pitch to obtain replacement caravans from them.

The commission considered that while combining the two activities involved a degree of restriction it was an acceptable business strategy which might offer a useful option to consumers. It considered that measures to prevent businesses combining caravan sales with site operation would be difficult to enforce and were not justified. It concluded that the complex monopoly did not operate and might not be expected to operate against the public interest.

The commission examined the practice of combined caravan dealer-site operators subsidising pitch rents from their sales of caravans. It did not think that it had significant effects on competition in the supply of pitches, and considered that it was attributable to legitimate business considerations rather than to the existence of a complex monopoly. It concluded that it did not operate and might not be expected to operate against the public interest.

The commission also commented on the practice of requiring caravan owners who wished to give up their pitches and sell their caravans to sell them to the site operator or remove them. It accepted that site owners were justified in retaining the right to determine who occupied a pitch, but they recognised that the practice put caravan owners in a weak bargaining position and might force them to take an unfairly low price, and it seemed important to them that there should be some safeguard for caravan owners.

The commission's conclusions were related to the present structure of the industry and it recognised that the practices which it examined could become more onerous to consumers if a scale monopoly developed, if the current conditions of complex monopoly operated more widely or if there was a general scarcity of pitches in relation to demand. However, it saw no reason to expect, as far as it could see, a scarcity of pitches such as to cause concern.

The commission suggested that the problems in the industry were well adapted to solution through a voluntary code of practice on the lines of that drawn up by the national association in 1980. This could cover the sale of caravans on the owners ceasing to occupy a pitch, the purchase of replacement caravans, and information about trading practices. It also made a suggestion, which the Government are considering, that the Northern Ireland Department of the Environment and other planning authorities should have regard to the supply and demand for caravan pitches when considering applications for new or extended caravan parks.

In the light of the commission' suggestion the Director General of Fair Trading intends to negotiate with the industry a code of practice for holiday caravans which would cover the United Kingdom as a whole and not just Northern Ireland.