UKNM: Internet vs bricks'n'mortar

[azeem azhar, lists]

piece on one of our companies in todays Times.


similar to intersaver issue a couple of weeks ago.

a



http://www.the-times.co.uk/news/pages/tim/99/12/09/timbizbiz01017.html?999

December 9 1999 BUSINESS NEWS 

Net outcry on tactics of vitamin company

BY PAUL DURMAN



A LEADING vitamins company stands accused of using bullying tactics to

stamp on cheaper competition from an Internet start-up headed by Jonathan

Taylor, the former chairman of Booker.

Solgar Vitamin and Herb, part of American Home Products, is refusing to

supply nutravida.com, and has urged its retailers to follow suit. A letter

to retailers from Gerald Eva, Solgar's managing director, points out that

nutravida.com is offering vitamin supplements "at 40 per cent below

suggested retail price".

Trevor Millett of nutravida.com said this is an anti-competitive attempt to

enforce a recommended price. The Office of Fair Trading said it is

generally illegal for a manufacturer to determine retail prices.

Mr Millett - part of the family that established the Milletts camping goods

business - encouraged comparisons with the vitamin price-fixing scandal in

the US. Roche of Switzerland and BASF of Germany were recently fined $900

million for their roles.

Mr Millett said: "RRPs [recommended retail prices] are out of date in

today's retail world. Quite rightly, the Internet is going to break the

whole system down."

Mr Eva said nutravida.com had not been singled out, and that Solgar was not

supplying other vitamin "e-tailers", such as ClickMango.com and

ThinkNatural.com. He said: "We're waiting to see how it's going to develop.

A recent report said 75 per cent of e-commerce firms are going to fail by

2002. We don't want Solgar on umpteen websites that are going to fail,

leading to unsatisfied customers."

Mr Eva said buying vitamins was not like buying books, and customers

established a pattern of purchasing from a particular source. He did not

explain why customers would be unable to pop down to Boots, or to a health

food shop such as Holland & Barrett.

The trial site of nutravida.com offers Solgar's cod liver oil at £2.95,

against the recommended price of £4.25. Solgar's Ester C food supplement is

offered at £4.95, against an RRP of £8.29.

Mr Millett, a former operations director with Asprey & Gerrard, the

jeweller, said nutravida.com has backing from Oyster Partners, a firm of

web designers, and esouk, an Internet venture capital firm.



azeem azhar, esouk.com			| wwww http://www.esouk.com/

uktel +44 (0)958 544 593 		| pwww http://azeem.azhar.co.uk/

ukfax +44 (0)207 691 0464		| icq 315460


Our first company is live! Go to http://www.nutravida.com/ to see it.



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