[ARCHIVED CONTENT] Competition Commission

On 14 November 1984 the Director General of Fair Trading sent to the Commission the following reference:

FAIR TRADING ACT 1973
REFERENCE TO MONOPOLIES AND MERGERS COMMISSION
STEEL WIRE FENCING

The Director General of Fair Trading in exercise of his powers under sections 47(1), 49(1) and 50(1) of the Fair Trading Act 1973 hereby refers to the Monopolies and Mergers Commission the matter of the existence or the possible existence of a monopoly situation in relation to the supply of steel wire fencing in the United Kingdom.

The Commission shall investigate and report on the questions whether a monopoly situation exists and, if so:

(a) by virtue of which provisions of section 6 of that Act that monopoly situation is to be taken to exist;

(b) in favour of what person or persons that monopoly situation exists;

(c) whether any steps (by way of uncompetitive practices or otherwise) are being taken by that person or those persons for the purpose of exploiting or maintaining the monopoly situation and, if so, by what uncompetitive practices or in what other way;

(d) whether any action or omission on the part of that person or those persons is attributable to the existence of the monopoly situation and, if so, what action or omission and in what way it is so attributable; and

(e) whether any facts found by the Commission in pursuance of their investigations in respect of the preceding questions set out in this paragraph operate, or may be expected to operate, against the public interest.

For the purpose of the reference ' steel wire fencing' means barbed wire and fencing made up in each case wholly or mainly from steel wire (including plastic coated and galvanised steel wire).

The Commission shall report on this reference within a period of two years from the date hereof.

On 10 December 1984 the Chairman of the Commission, acting under section 4 of the Fair Trading Act 1973 and Part II of Schedule 3 thereto, directed that the functions of the Commission in relation to the reference should be discharged through a group consisting of six members of the Commission, under the chairmanship of Mr D G Richards, a Deputy Chairman of the Commission. One member subsequently resigned from the group and was replaced on 9 January 1985 by Mr G D Gwilt. The composition of the group which completed and signed the report is indicated in the list of members which prefaces this report.

Notices inviting interested parties to submit evidence to the Commission were placed in the following publications:

We sought evidence and views from producers, distributors and importers of steel wire fencing (SWF) products, and of steel wire used for SWF (some companies traded in both). We also wrote to the British Independent Steel Producers Association (BISPA), to which all the major United Kingdom steel wire producers belonged, and other trade associations including those representing end-users of SWF products; a number of end-users were also approached directly. Also approached were the Trades Union Congress (TUC) and the Amalgamated Society of Wire Drawers and Kindred Workers (ASWDKW), the British Standards Institution (BSI), and certain Government departments. Hearings were held with two small producers of SWF (one of these being Inwire Ltd—see paragraph 8.2); Allied Steel & Wire Ltd (ASW), principally a producer of steel wire; an importer; two main wholesalers; ASWDKW (which was accompanied by a TUC representative); the Department of Trade and Industry (DTI); and BSI.

Members and officials of the Commission visited the headquarters of TWIL Ltd (TWIL) at Sheffield, and the works of one of its subsidiaries. Officials of the Commission also visited most of the other producers of SWF, and some importers and main wholesalers. To ascertain the size and structure of the SWF market and the views of those involved in it, the Commission sent questionnaires to TWIL and to other producers and importers of both steel wire and SWF, to wholesalers of SWF, and to a representative sample of retailers, agricultural distributors and end-users (for details see Appendix 1). The information which we
gathered was for 1984, or the accounting year corresponding most closely to 1984.

On 13 December 1985 we informed TWIL of our provisional conclusion that a monopoly situation as defined in section 6(1)(£) of the Fair Trading Act 1973 existed in favour of TWIL in relation to the supply of SWF in the United Kingdom. We notified the company of the ground for this provisional conclusion and set out the issues which the Commission would need to consider when assessing the effect of the monopoly situation on the public interest.

Section 82(l)(a) and (b) of the Fair Trading Act 1973 requires us (in making a report) to

Consistently with these provisions and with section 133(1) of the Act (nondisclosure of information about a particular business without the consent of the person for the time being carrying on the business), our letter of 13 December 1985 did not reveal the identities of the firms which complained to us about TWIL's conduct, nor any details which might reveal their identities. TWIL asked us to disclose more details, submitting that without them the company could not deal fully and fairly with complaints about its conduct. We saw some force in this and therefore sought the permission of the firms concerned to disclose more details, which in effect meant their identities. Where firms did not wish us to disclose such
information as was likely to reveal their identities, and where we did not think further disclosure was relevant, we used their information as a basis for pursuing particular lines of inquiry. But where firms did not wish us to disclose more information to TWIL, and where we thought further disclosure such as was likely to reveal their identities was relevant, we gave TWIL as much detail as the firms allowed.

We received a written submission from TWIL in response to our letter of 13 December 1985, and representatives of the company, accompanied by Counsel, attended hearings in May and July 1986 for the purpose of discussing these matters with us. TWIL also provided us with supplementary written evidence.

Some of the evidence obtained from TWIL and others in the course of the inquiry was of a commercially confidential nature; our report contains only such information as we consider necessary for an understanding of our conclusions.

Throughout our report, except where stated otherwise, 'TWIL' means TWIL Ltd or the Group consisting of TWIL Ltd and its subsidiary companies, of which those concerned with SWF were:

as appropriate. The first five of these subsidiaries, all of which were wholly-owned,
manufactured and thus supplied SWF. The first four comprised TWIL's Wire Division.

Our inquiry made considerable demands on the SWF industry in general, and on TWIL in particular. We should like to place on record our thanks to everyone who helped us.

Steel Wire Fencing
A report on the supply of steel wire fencing in the United Kingdom.

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Steel Wire Fencing A report on the supply of steel wire fencing in the United Kingdom.

Summary

Full text

Contents

Chapters

Steel Wire Fencing
A report on the supply of steel wire fencing in the United Kingdom.