THE country's biggest music retailer yesterday dismissed complaints
about ''excessive'' profits on compact discs as consumer watchdogs
stepped up demands for a new inquiry into prices.
W. H. Smith, owner of the 300-store Our Price music chain, said it had
nothing to fear from a fresh investigation into why CDs cost #4 to #5
more than identical recordings on vinyl and cassette tapes although they
all cost about the same to produce.
The Consumers' Association said: ''Consumers are fed up with CD price
levels.''
Its protest came as Sir Bryan Carsberg, the Director General of Fair
Trading, reviewed files on an earlier 15-month investigation into CD
prices.
He said in a letter to Labour consumer spokesman Nigel Griffiths that
he would review the evidence before deciding whether there was a case
''for additional work and perhaps formal regulatory action''.
Sir Bryan's letter said there were some indications that CD prices
were higher than necessary but the evidence was not clear-cut.
Mr Griffiths, who has been campaigning on CD prices, said: ''CDs are
overpriced and far dearer than the component costs merit.''
Mr Stephen Locke, the head of policy at the Consumers' Association,
said Sir Bryan needed to try to explain the causes of excessive UK
prices.
W. H. Smith spokesman Kevin Hawkins said: ''There is no way our profit
margins on CDs can be described as excessive.
''If Sir Bryan feels the first inquiry missed out anything, we will
happily cooperate with him.''
Total sales of CDs, cassettes and vinyl LPs during the last financial
year were worth approximately #1000m -- of which vinyl's share was just
#60m while CDs took about half the total.
An EC probe into CD prices has been ruled out by the Brussels
competition policy commissioner, Sir Leon Brittan, the British
Phonographic Industry said tonight.
The BPI, the trade body for the UK recording industry, said the ruling
came in a European Parliament written answer it had obtained.
Sir Leon said there was ''insufficient evidence'' about any
price-fixing cartel in CDs or any other anti-competitive practices
''within the European Community in general and in the UK in
particular''.
BPI director general John Deacon added: ''The average price of CDs in
the UK sits quite clearly in the middle band of typical retail prices
throughout Europe.
''Over a third of CDs sold in the UK are at budget or mid-price. The
pricing of the industry's products is more competitive than ever.''
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