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Summary

On 10 September 1987 the Department of Trade and Industry sent to the Commission the following reference:

Whereas it appears to the Secretary of State that it is or may be the fact that arrangements are in progress or in contemplation which, if carried into effect, will result in the creation of a merger situation qualifying for investigation as defined in section 64(8) of the Fair Trading Act 1973 ('the Act') in that:

(a) an enterprise carried on in the United Kingdom under the name Book Club Associates will cease to be distinct from an enterprise carried on under the name Leisure Circle; and

(b) the value of the assets taken over exceeds £30 million.

Now, therefore, the Secretary of State in exercise of his powers under section 75 of the Act hereby refers the matter to the Monopolies and Mergers Commission for investigation and report within a period of three months beginning with the date of this reference.


(Signed) S W TREADGOLD
An Under Secretary
10 September 1987 Department of Trade and Industry

On 28 September 1987 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 this reference should be discharged through a group consisting of six members of the Commission. He appointed Mr R G Smethurst, being one of those members, to act as Chairman of the group. The composition of the group 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 Financial Times
The Guardian
The Times
The Bookseller
The Publishing News

In addition we sought evidence and views from Government departments, representative organisations, publishers, book clubs, booksellers and consumers' organisations. The views of many of those who responded are summarised in Chapter 5.

We received written submissions from W H Smith & Son (Holdings) PLC (WHS), Bertelsmann AG (Bertelsmann) and Les Presses de la Cite (Les Presses). Book Club Associates (BCA) and Leisure Circle also submitted written information in reply to a questionnaire prepared by the Commission. Members of the group accompanied by staff visited the BCA and Leisure Circle office and warehousing facilities at Swindon and Wellingborough respectively. A member of
the group and staff visited the facilities of Readers Union and David & Charles at Newton Abbot.

We held a number of hearings: two each with WHS, Bertelsmann and Les Presses, and others with the Publishers Association, the Booksellers Association and enterprises concerned with publishing and book clubs.

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

We should like to place on record our thanks to all those who helped us in our inquiry and particularly to the three companies principally concerned and the managements of the two book clubs.

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