16 June 1995

UKtackle men rapped for EU trade offences

By Stephen Howe

COLLUSION in the UKs farm machinery industry has been slammed by the EU.

The EU Competition Directorate, which deals with restrictive trade practices, says that it found evidence the Agricultural Engineers Association and the UKs dealer organisation BAGMA co-operated to restrain the so-called grey imports of farm tractors in the UK.

That practice was contrary to Article 85 of the EC Treaty and, should the commission be informed of any similar practice, fines would be imposed, said head of the Competitions Directorate, Franco Giuffrida.

His comments follow his departments long running investigation into the alleged anti-competitive activities of some leading UK tractor suppliers, their trade organisation the AEA and BAGMA.

It began in the early 80s when a number of UK dealers found they could buy tractors from their counterparts on the Continent at prices often more than 20% cheaper than those of the UK supplier.

"It was just entrepreneurial flair to get tractors elsewhere in Europe at lower prices than those prevailing in the UK. The difference was put down to a combination of exchange rates and product price," said a BAGMA official.

The UK tractor companies were alleged to have approached the dealers through BAGMA to help identify the level and significance of grey imports. They also tried to stop them entering the country on the basis that they did not comply with UK safety and technical requirements.

The Competition Directorate also suggests that tractor registration information supplied by the AEA to its members had been used to track down grey imports.

Hot denial

That was hotly denied by an AEA spokesman. "The European Commission has misunderstood the intention behind the figures.

It has underestimated the benefits which flow to the consumer which is having an industry which is well informed about the nature of the market. It is quite wrong. There was no co-operation with BAGMA," he said.

&#8226 The AEA also denied suggestions that a letter sent to members, saying the 1996 Smithfield Show must not be affected by the introduction of another event (such as Smithfield FarmTech), was a further example of collusion.