A major online retailer has claimed he repeatedly warned bathroom suppliers that they were breaching competition law but they chose to ignore his concerns.
Speaking exclusively to kbbreview, the source, who did not wish to be named, insisted other web dealers had also raised the issue with suppliers but their warnings had gone unheeded.
As a result, bathroom supplier Ultra Finishing was last week hit with a £826,000 fine by the Competitions and Markets Authority (CMA) after admitting trying to restrict online discounting on sales of its Hudson Reed and Ultra-branded products.
“I don’t know how [bathroom suppliers] thought they would get away with it?” the source said. “They were told repeatedly by myself and other online retailers that what they were doing was illegal and they were too arrogant to listen. The other question of course is – who’s next?”
The source claimed at least three other brands were “in trouble” with the CMA. “I need to get into my other suppliers right now,” he said, “because there is a huge opportunity here for whoever cuts their prices first on websites – eBay, Amazon and Google shopping.”
Responding to the claims, Ultra CEO Dave Cullen said: “It’s clear that the CMA are expecting this activity to now stop or there’ll be further action. The fine is meant to be a deterrent to anyone carrying on doing these activities. I don’t think they’ll retrospectively go back unless they see it continuing.”
However, the online source said he found it “hard to believe” that the CMA wouldn’t pursue other cases. “Ultra have themselves supplied all of the details about others doing it so you would expect the same treatment to be dished out,” he said. “I know for a fact one major company is in as deep as Ultra.”
“Any concerted practice which restricts competition is illegal, it’s as simple as that. Any action or restriction which places someone at a competitive disadvantage is illegal.
“Those who say ‘e-retailers must play the game’ – no they don’t, it’s called evolution and it’s how the world works. Some say that there will be no independent retailers left in ten years but that’s how the world is nowadays. [kbbreview columnist] Derek Miller said in one of his articles that “average showrooms with average knowledge and average skills” will soon die out. He’s right, that’s evolution, albeit commercial evolution, at work. But the strong showrooms will survive, and probably thrive.”
Meanwhile, Yvonne Orgill, CEO of the Bathroom Manufacturers Association, confirmed that the organisation is “taking the CMA investigation very seriously” and is working with the CMA to ensure manufacturers are “fully up to speed with what they can and cannot do”.
“With this in mind,” she said, “the CMA will be attending the BMA Annual General Meeting on June 29 to speak with members on this subject and offer advice and guidance to ensure they do not fall foul of this very contentious issue.
“Following the AGM, the BMA website will contain links to a CMA portfolio of training and guidance material – this will be accessible to all.”
When asked whether the CMA ruling meant the online channel had ultimately triumphed over independent showrooms, Orgill said: “I don’t think anybody has won here. Contracts need to address all aspects and not discriminate, which is what the law says. The CMA will be speaking in the AGM open session and it should prove to be a lively discussion. They too must be concerned as to agree to speak so soon after the announcement – they approached me to speak at our meetings.”