Price Ring on Tyres Alleged
Page 36
If you've noticed an error in this article please click here to report it so we can fix it.
AFTER twice calling for tenders for a three-year contract to supply and maintain the tyres on Birmingham Corporation's 1.700 buses and receiving identical quotes on each occasion, the city's transport committee has chosen the Dunlop Rubber Co.
The committee deferred a decision two months ago after it had asked eight firrns—the only ones in the country capable of undertaking such a contract—to tender. The companies concerned— Dunlop (which has held the contract since 1953), Goodyear, North British, India, Michelin. Avon, Firestone and Pirelli-submitted identical tenders to within three decimal points of a penny. The contract is believed to be for £400,000.
Convinced that the firms were operating a price ring, the Corporation has complained to the Registrar of Restrictive Practices. A reply is still awaiting. In fact, the committee has been convinced that the alleged price ring has been operating for a considerable time and has made two similar complaints about those tendering for this particular contract in the past 12 years.
After waiting a few weeks, the transport committee tried again, hoping the tyre firms might have had a change of heart. This time they advertised in the technical Press. Seven firms answered with exactly the same figures as before, but Pirelli failed to re-tender.
" However, Firestone did throw sortie light on this stupid state of affairs", said Cur. Frank Gillespie, chairman of the transport committee. "They explained that as they had no previous experience Of the conditions under which their tyres would be operating, they had to rely on the figures of the contractor to whom the contract had been let previously. This may well be the true explanation but its effect is exactly the same as a price ring."
Cilr. Gillespie added that his committee decided to place the contract with Dunlop because it would offer employment to local people.