Electrical Equipment
Page 13
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THE Monopolies Commission, as this journal forecast last week, has now issued its report on the supply of electrical equipment for mechanically propelled land vehicles (see page 21). A marathon survey, it has taken over 61 years to produce, the reference by the Board of Trade having been made to the Commission on April 18, 1957. What, really, does this weighty document mean?
One matter of considerable public significance is that the Monopolies Commission has rejected the substance of what it heard in defence of retail price maintenance. It was told that the ending of such practices, for replacement equipment obtained through distributors, would reduce quality and standards of service. The view of the investigators, however, is that the abolition of fixed prices would help to eliminate the inefficient distributor. The Commission felt that the case in defence of such practices was exaggerated.
Four groups—Champion Sparking Plugs, Chloride Electrical Storage, Joseph Lucas (Industries) and S. Smith and Sons (England)-are categorized as " monopoly " suppliers in one or more of the fields under scrutiny by the Commission. This is not,, in itself, derogatory to the concerns; there are, of course, many instances in -public trading where monopolies function in the public interest. But, as the Commission made clear, the use of such position, and of price differentiation, to maintain market dominance to secure excessive rates of profit is objectionable if it occurs.
The Commission's view was that the monopoly conditions do not, and cannot be expected to, operate against the public interest. What they could not agree with was some of the .trading practices. Overall, the electrical equipment industry as a whole has been given much to think about in this report.