Brussels, 27/01/2000 (Agence Europe) - The EU consumer organisations have entered a new stage in their fight for the introduction of free competition in the system for new car sales on the internal market. During a meeting with Mario Monti, Competition Commissioner, BEUC (The European Consumers' Organisation) and the British Consumers' Association urged the Commission to take advantage of the current revision of rules in force (Community Regulation 1475/95 that expires in October 2002) to put an end to block exemption which allows car makers to fragment the single market and keep prices at artificially high levels in some countries, and especially in the United Kingdom. Such practice is made possible because the regulation authorises selective and exclusive distribution rights between car manufacturers and dealers. In support of its claims, the Consumers' Association presented a petition to the Commissioner. It was signed by 20,000 British consumers who complain of the astronomical prices practised in the United Kingdom. The demands and arguments that the consumers' representatives put to Mario Monti were presented to the press by Jim Murray, BEUC President, and Mrs Jenny Driscol of the CA. They are as follows:
Consumers' representatives would also like to see an assurance from the Commission that it will engage in more systematic monitoring. They mainly feel that the Commission should: a) actively police the market for anti-competitive behaviour rather than acting mainly on complaints as it does at present; b) set up a committee open to consumer' representatives, to monitor developments in the market place; c) publish annual reports on findings.
Jim Murray underlined the fact that this is a very important issue for consumers as the purchase of a car is one of the largest outlays of their budget. In his view, block exemption has often been presented by the automobile industry as a right or a necessary distortion of competition rules justified by the supposed advantages that it would bring to consumers. Proof of any such advantages has not, however, ever been made, quite the contrary. He said manufacturers wanting to keep block exemption should show proof of the advantages for Europe.
Mrs Driscol added that between 62 and 75 models of cars at the top of the hit-parade in sales are more expensive in the United Kingdom than elsewhere in Europe. She said they have written to manufacturers who were hostile to their arguments. The President of Ford was the most recalcitrant, she said, adding that they were also badly received by the dealers' association. On the other hand, she was pleased that British consumers had reacted well to the BEUC campaign by boycotting the purchase of new cars - a boycott, she said, that was very effective as it caused a loss for manufacturers, estimated by the Consumers' Association at £100 million. The inquiries carried out by the Parliament, she concluded, supported BEUC's point of view. "We want to take our fight to European level and to keep pressure up for the abolition of block exemption. Manufacturers will brandish the threat of relocation. National governments will be under pressure. Hence our hope that the Commission will adopt a broader vision of the question", she concluded.
According to BEUC, the argument whereby consumers may already bring competition into play by buying their car in the Member State of their choice, does not hold water. This is a theoretical right which is very difficult to put into practice, mainly for British consumers, given, among other things, the fallacious pretexts that are sometimes put forward by dealers for not delivering the cars, in compliance with the instructions they receive from manufacturers. "Dealers have no margin of manoeuvre. They have to apply the prices imposed on them by the makers. Granting a discount amounts to taking the risk of losing supplies. The retailer is not a protagonist at the service of the consumer but rather an agent for the manufacturer", criticised Mrs Driscol. In her view, the Internet should, in theory, improve the situation, but this is not the case in reality as the sites that do exist (American sites for example) are only show cases. "Volkswagen United Kingdom has told us it is not authorised to advertise on the Internet".
Answering questions on their hopes of winning the case after their meeting with Mr Monti, the consumer representatives said they were circumspect about this and spoke of the prospect of a "long fight against a very powerful industry". For the manufacturers' position, see EUROPE of 25 January, p.14.
On the Commission side, it is time for dialogue. "The Commission is listening closely to the position of consumers and other interested parties", said the spokesman's service for Mario Monti. A questionnaire was sent to all parties concerned in 1999. The response - including that of BEUC forwarded on 14 January - will serve as a base for the report that the Commission will be publishing by the end of the year on how the current system works. Proposals of a new system that it will present in 2001 will be submitted to Member States and to other interested parties for consultation.