§ Sir J. Hutchison
asked the President of the Board of Trade when the Monopolies and Restrictive Practices Commission's Report on the supply of sand and gravel in central Scotland will be published; and if he will make a statement about its contents.
§ Mr. P. Thorneycroft
The Report was published today. The Commission finds that the conditions defined in Section 3 of the Monopolies and Restrictive Practices (Inquiry and Control) Act, 1948, prevail, as the members of the Washed Sand and Gravel Association 155W (the West Association) and the members of the Mid-Scotland Washed Sand and Gravel Association together supply more than one-third of the sand and gravel (measured either by weight or value) supplied in the reference area, and restrict competition in certain ways.
Each Association covers a merchanting area. Within, and part of, each merchanting area is a scheduled area. For the various grades of washed sand and gravel, each Association prescribes minimum ex-pit prices applicable to all member pits within its merchanting area. Each also prescribes minimum delivered prices throughout its scheduled area and minimum haulage rates to places in its merchanting area but outside its scheduled area. The Commission finds that, as a result of this system, the general level of ex-pit delivery prices for washed sand and gravel is higher than it might be expected to be under price competition, and it is unable to find any justification for the artificial maintenance of these prices. It concludes that the system operates against the public interest and should be discontinued.
All members' sales of washed sand and gravel, whether ordered directly by a consumer or ordered by a merchant, are normally invoiced centrally through the secretaries of one or other of the Associations, who receive the money and pay the producers. The Commission is satisfied that the most important effect of central invoicing is to ensure the observance of the minimum price system and consider that, even in the absence this system, central invoicing might tend to make for the observance of common prices. It concludes, therefore, that central invoicing is against the public interest and should be discontinued.
The West Association has a rule that its members may not quote for screened unwashed concrete sand. This Association also has an arrangement under which public and local authority schedules for the supply of washed sand and gravel are submitted through the Association secretaries. The Commission considers that both these rules are against the public interest and should be discontinued.
The Associations have stop lists which cover persons who fail to pay for supplies. The Commission finds that these stop lists, the fixed water content allow 156W ances given in the West Association Areas and the methods of weighing prescribed by the Associations are not in themselves against the public interest and, in the absence of the common minimum price and haulage rate system, it would not expect them to operate against the public interest.
Association merchants bind themselves to purchase all their supplies of washed sand and gravel for delivery in the combined Merchanting Areas from Association members. They agree to observe the Association minimum prices, to conform to other arrangements of the selling scheme, and not to sell screened unwashed concrete sand in the Association areas. In return, they receive a fixed discount on their sales and, unlike other merchants, are allowed by the Associations to buy washed sand and gravel at ex-pit prices. The Commission considers that these arrangements operate against the public interest and should be discontinued.
In the absence of the common minimum price and haulage rate system, however, they would see no objection to the maintenance by the Associations of a selected list of merchants, who would accept responsibility for settlement of customers' accounts and make a deposit as a guarantee of financial stability in return for a special discount, always provided that producers were free to give to other merchants what discounts they chose.
So far as action on the report is concerned, as indicated during the Second Reading Debate on the Restrictive Trade Practices Bill, the Government do not propose to take action on matters which will be subject to the jurisdiction of the proposed Restrictive Practices Court.