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Last Updated: Tuesday, 15 November 2005, 16:41 GMT
Firms 'ramping up online prices'
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About 5bn of electronic goods will be bought online this Christmas
Leading electronics companies have been accused of ramping up prices for online shoppers in the run-up to Christmas.

The Office of Fair Trading (OFT) said it was examining a complaint from the Interactive Media in Retailing Group.

The IMRG says manufacturers have been raising wholesale prices for online retailers - leaving them unable to undercut High Street prices.

The OFT declined to say which firms were being probed, while manufacturers say they have done nothing wrong.

The alleged practice of "dual pricing" means that High Street stores and e-tailers face different wholesale charges.

But the manufacturers argue that there is only one price for all resellers - but some are offered discounts, based on commercial considerations.

Analysts say the discounts tend to go to traditional retail outlets as, among other things, they allow the manufacturer's products to be put on display.

'Unfair pricing'

The IMRG says dual pricing stifles competition and the higher costs are forcing online sellers out of business as well as leading to higher prices for consumers.

Sony offers a common basic trade price to all resellers, online and offline
Steve Dowdle, managing director, Sony UK

And they say that the big manufacturers are abusing their position.

"This... must be stopped immediately," said James Roper, chief executive of IMRG.

"Twenty-four million British consumers have embraced internet shopping. They are collectively investing 6bn a year in PCs and internet connections that give them their own, personal shopping environments - their High Street at home.

"These consumers are directly bearing many of the costs previously carried by bricks-and-mortar shops, which is a major reason for internet shopping prices being highly competitive."

Mr Roper also said that research from 24 European countries indicated that the UK was the only country to be targeted by dual pricing.

Denial

Some media reports had suggested that one of the companies concerned was Sony, but the firm has strongly denied that it operates a dual pricing system.

"Sony offers a common basic trade price to all resellers, online and offline. What is true is that Sony offers discounts to qualifying retailers, which benefit consumers," said Steve Dowdle, managing director of Sony UK.

Mr Dowdle said Sony's practice of offering discounts was nothing new, and was not unlawful under UK or EU law.

"We supply retailers using a comprehensive set of commercial conditions that reward all dealers who add value to the brand proposition and purchasing experience.

"The commercial conditions recognise the different consumer experience and service that retailers offer to their customers," he added.

According to IMRG, 20% of electrical goods, worth an estimated 5bn, will be sold online in the run-up to Christmas.




SEE ALSO:
Sony profits down on TV price dip
27 Oct 05 |  Business
Sony to cut 10,000 jobs worldwide
22 Sep 05 |  Business
Shoppers turn to web for bargains
25 May 05 |  Technology
Online stores come under attack
18 May 05 |  Technology
eBay 'most popular brand' online
21 Apr 05 |  Technology
Web shops face tighter security
18 Apr 05 |  Technology


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