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EC 'preparing to abolish' Block Exemption

The European Commission is preparing to drop the Block Exemption regulation, according to the FT today.

A senior Commission official is quoted by the FT as saying: "The current regime has created problems and is not working in the interests of consumers. Pure renewal of the system is extremely unlikely."

New draft rules will be presented to the full Commission before the end of the year, paving the way for the expiry of the block exemption in September 2002.

One senior Commissioner, who declined to be named, is also quoted as saying: "Left to its own devices, the competition directorate will go for a free-for-all system of car retailing. The Commission has not been impressed by the pleading of the carmakers."

The EC declined to comment on the report.

A hearing has been organised by the European Parliament next week on the future of the exemption

While determined to abolish it, the European Commission hopes to deflect industry opposition by introducing a loose "umbrella" of retailing rules, which would offer limited protection to dealers while improving consumer choice and enhancing price competition.

Officials familiar with the draft plans indicated that they would allow more multi-franchising, with competing brands being sold in the same showroom.

The obligation on new car dealers to provide servicing is also "likely to be removed". (September 7, 2001)

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