The probe centres on activities of the Oxfordshire-based NIBS Group, a major aftermarket distribution organization which specializes in the body repair sector. It supplies refinish paint, bodyshop and workshop consumables, valeting products and cosmetic repair ranges.
AM understands NIBS’s Long Hamborough offices were raided over Easter. OFT officials are now considering whether NIBS’s contract arrangements could be preventing effective competition in the sector.
NIBS is formed of 11 independent distributors, with 57 outlets spread across the UK. It was established in 1990 to win business with group accounts, and its most recent stated turnover – 2002 – was £77m.
Morelli, one of the NIBS members, says in a statement that it has been advised by its solicitors to have no further involvement in NIBS trading arrangements, but in the short term it intends to remain a member, while cooperating fully with the OFT.
“Morelli has been advised that the current NIBS trading arrangements are unlawful,” it says. “Morelli’s view is that all companies involved should be cautious and not engage in any activities that might be anti-competitive.”
Morelli says it continues to trade as usual with all customers and suppliers on existing contract terms, although it is now only contracting on a bilateral basis with customers and suppliers and has no further trading relationship with NIBS or its members.
Other NIBS members include Carlac, Mallaband Factors, F&K, Cunbar, TRI, Hickley Valtone, Mitchells, Karkraft, Waregrain and Gils Motor Factors. The NIBS website promotes a client list including European Motor Holdings, Pendragon, Listers Group, Hartwells, Sytner and HR Owen. It also claims preferred supplier status for a number of carmakers including Mercedes-Benz, Ford and Vauxhall.
One bodyshop owner believes this could be the start of a wider-ranging probe in the sector. “Will the OFT look into relationships between paint supplier groups, car manufacturers and insurers?” he asks. “Will the mysteries of the paint rebate system be unravelled? Will the investigation spread to the approval systems run by insurers?”
NIBS and the OFT both declined to comment on the inquiry.