§ Mr. David NicholsonTo ask the Chancellor of the Duchy of Lancaster when the report of the Monopolies and Mergers Commission on artificial lower limbs is to be published; and if he will make a statement.
§ Mr. MaudeThe report on the supply of artificial lower limbs in the United Kingdom is published today. The Monopolies and Mergers Commission found that certain 537W conduct of the largest supplier of artifical lower limbs in the United Kingdom, InterMed Ltd., a subsidiary of BTR plc with a market share of 70 per cent., operated against the public interest. Chas A. Blatchford and Sons Ltd., with a 26 per cent. market share, was also a monopolist, but the Commission did not find any conduct of this company that operated against the public interest.
The commission found that InterMed, through its three subsidiaries—J. E. Hanger & Co. Ltd., Vessa Ltd., and Robert Kellie and Son Ltd.—had obtained prices for, and profits from, its supply of artificial lower limbs which were higher that could be expected in circumstances of normal competition. In addition, it had used its monopoly position to place unreasonable pressure on public sector purchasers, having regard to the nature of the sector, and had been unco-operative with them. Because of this InterMed had not given sufficient regard to the interests of patients.
The commission recommended that, subject to a report from the disablement services authority to the Director General of Fair Trading on the impact of the impending round of tendering for prosthetic services at certain disablement services centres on InterMed's business, InterMed should divest itself (within six months of 30 April 1989) either of Hanger or Vessa, and that neither company should be sold to Blatchfords. They also recommend that, both before and after such divestment, InterMed be required to supply the products in question to any public sector purchaser or contractor on the same terms, conditions and prices as they were made available to its own prosthetists and technicians; and the Director General of Fair Trading invite a further report from the DSA by 30 September 1990 on the progress made towards promoting a more competitive market.
I welcome this report and accept the MMC's findings and conclusions. However, in view of current changes in the state of competition in this market, I am asking the Director General of Fair Trading to advise me as soon as possible whether in order to remedy the adverse effects the MMC identified it is still necessary to require InterMed to divest part of its artificial lower limbs activities. Also I am inviting the Director General to seek undertakings from BTR, or its subsidiary InterMed, not to discriminate between, on the one hand, public sector purchasers and contractors and, on the other, its own prosthetists and technicians in the supply of artificial lower limbs.