Web sellers take issue with wholesale costs

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Sony, Panasonic, Philips, Hitachi and Sharp have come under fire from the UK’s online retail industry for charging shopping websites higher wholesale prices than they charge shops.

The Interactive Media in Retail Group, which represents UK e-tailers, is asking for urgent talks with the electronics manufacturers over the issue.

The five groups are understood to have declined to give online stores the same discounts on hi-fis, DVD players and other electronic goods that they offer to shops.

Their approach has effectively made prices 10-15 per cent higher for online retailers, many of whom have margins of just 5-6 per cent.

Electronics manufacturers argue the discounts are justified for traditional bricks and mortar retailers because they often invest more in displaying goods and training staff to demonstrate the products.

“We . . . reward all dealers who add value to the brand proposition and purchasing experience.

“We are confident that our commercial conditions are legal and are in the best interest of consumers,” Sony said.

However, James Roper chief executive of the IMRG, warned that consumers were likely to see the practices as unfair. “There will be a big consumer backlash. Consumers will be voting with their credit cards to show what they think of this anti-consumer, anti-internet behaviour,” he said.

The IMRG has asked the UK’s Office of Fair Trading to look into the issue. It has also had informal talks with the European Commission.

The Royal National Institute of the Blind has raised concerns about the dual pricing policies, arguing that they discriminate against the UK’s 2m blind and partially sighted people, many of whom find online stores their only viable shopping outlet.

The IMRG said dual pricing so far appeared to be limited to the UK and to the electronics sector. It was begun last year by Sony and the other manufacturers have followed suit.

“This is simply price control. They were worried about these sites being so aggressive on price and they wanted to stop that,” said one internet retailer who declined to be named.

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