AM Online

The Big Picture: Mixed views on BER future

Mutterings in the corridors of power are starting to turn to the imminent review of Block Exemption.

Although the legislation won’t be renewed, revised or dropped until 2010 – revision is the safe bet – the decision will be taken at least a year before to leave time for the inevitable consultation, implementation and adjustments by manufacturers and dealers.

The interested parties are starting to lobby key European legislators – although, oddly, Which?, the vociferous consumers’ champion, has not set out its own position.

The NFDA is keen to put itself at the centre of the debate having already met EC head of competition Paulo Cesarini at the start of the year. Having broken away from the European umbrella organization CECRA, the NFDA is pressing ahead with its own campaign to keep a slightly modified Block Exemption, one that abolishes the one-year notice of network restructuring in favour of a two-year agreement.

But what does the industry want? Views about the future of BER vary depending on the size of retailer. A number of big groups – those in the AM100 top 50 – have privately expressed the view that they are happy to see BER scrapped altogether. That view is echoed by several manufacturers in the UK.

The smaller groups want to retain some form of controlled trading because they fear the free for all that has allowed supermarkets like Tesco and Morrisons to dominate the food retail sector. But consolidation in car retail is happening anyway, and will continue to happen irrespective of BER.

In the UK, BER has been a mixed success – failing to meet objectives on aftermarket competition, but successfully reducing new car prices. Elsewhere in Europe, where parts and labour are cheaper, BER is not seen as such a big issue for customers.

It’s unlikely that BER will be scrapped – the German, French and Italian governments, under pressure from carmakers, will see to that. But it will certainly be modified and this is the area where the lobbyists will be looking to exert their influence.

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