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Subject: UKNM: Internet vs bricks'n'mortar
From: azeem azhar, lists
Date: Thu, 9 Dec 1999 13:00:55 GMT

piece on one of our companies in todays Times.

similar to intersaver issue a couple of weeks ago.

December 9 1999 BUSINESS NEWS
Net outcry on tactics of vitamin company

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Mr Millett said: "RRPs [recommended retail prices] are out of date in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