It's official: British PC dealers do not rip off their customers.[QQ] Brits pay higher prices for PCs than their European counterparts because they buy better spec machines. Or so says the Office of Fair Trading (OFT). After a 10-month investigation, it decreed that computer retailers - and more specifically, Dixons Group - were not making excessive profit (see feature, page 60). What took the OFT so long? The case against Dixons had no merit then. And it has no merit now. A ten-minute chat with Dun & Bradstreet would have revealed few tales of retailers living the high life. The OFT enquiry was sparked off by intervention from Peter Mandelson, trade and industry secretary at the time. His interest was piqued by a ludicrous attack by Intel's Craig Barrett on Dixons at last year's Comdex. British PC sales were lower than in some other European territories because Dixons' margins were too high, he claimed. A few weeks later Barrett was forced to eat humble pie. His grovelling letter of apology somehow made its way to the press. The UK PC market is highly competitive, with manufacturers, distributors and resellers slugging it out for a share. This could change, but a lot more firms will have to stop supplying PCs first. And that will be when the PC market starts acting like the consumer electronic market, where 'rip-off Britain' is alive and kicking. A PC retailer told me recently of his extreme difficulty in getting games console franchises - largely because of his desire to discount prices over the Web. "Manufacturers want to protect their existing retailers. They are demanding price maintenance - and that is illegal," he said. Quite. Now lets look at Web retailer Intersaver, launched this month. It offers brown and white goods at up to 35 per cent off list price. But not Panasonic and Sanyo. In interviews, the electronics giants cited the "value-added services the retailer is able to offer" and "quality criteria" for their refusal to trade with Intersaver. Yeah, right. This is rip-off Britain at its worst, with manufacturers using restrictive distribution to artificially maintain prices and protect margins of incumbent retailers. The Panasonics and Sanyos could argue they need to protect their brands. But this holds little weight, considering you could walk into a supermarket and walk away with a fistful of branded consumer electronics. And the big high-street electronics retailers are not exactly upmarket. Web retailing is coming to the UK and that means open distribution and keen pricing. These concepts may be foreign to some, but there is little they can do about it in the long term. In the short term, a more meaningful OFT investigation into illegal retail price maintenance, backed up by a high-profile lawsuit or two, would come in handy for British consumers - and the companies that want to serve them.
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