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Dealers told 'complain to OFT over BE'

Dealers left reeling from any negative impact of block exemption are being urged to complain to a more robust Office of Fair Trading. From May 1, 2004, the OFT will have greater power and resources to look at the issues arising from changes to the way new cars are sold.

Effectively, it could scrutinise the relationship between manufacturers and dealers and intervene to prevent anti-competitive behaviour. That could mean imposing a financial penalty of up to 10 per cent of turnover and issuing a directive to stop the conduct. Currently, officers are not able to enforce European Commission legislation.

Alan Williams, vehicle competition specialist at the OFT, says: “Our agenda will be largely set by dealers coming forward with hard facts of suspected infringement. If it comes to an infringement case, they will have to be willing to stick their heads above the parapet.”

The Retail Motor Industry Federation is calling on the OFT to focus on “onerous” dealer standards where carmakers add huge costs to a business without generating better returns. Alan Pulham, RMI franchised dealer director, warns that some standards are designed to trap dealers into a franchise. “Certain standards stop dealers being shopkeepers and instead make them part of the brand – a certain kind of furniture does not increase sales,” he says.

Giving the OFT more power is part of a wider EC initiative to monitor the impact and progress of revisions to block exemption rules.

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