Last-ditch bid to re-open microwave pricing case

Date: 26/04/01

By Laurence Frost

THE director of a bankrupt company is mounting a last-ditch crusade to reopen a European Commission investigation into alleged anti-competitive behaviour by the multinational that drove him out of business 13 years ago.

Paul Gregory, founder and CEO of UK firm Microwave Ovenware Limited, wants Euro MPs to demand an inquiry into the way officials handled his claims of predatory pricing by the Norwegian company Dynopack.

His bid has the backing of anti-corruption organisation Transparency International, as well as several British MEPs on the European Parliament's petitions committee, which discusses the case today (26 April).

Labour MEP Robert Evans and Conservative committee vice-chairman Roy Perry are among those supporting the call - as well as Liberal MEP Sarah Ludford, who believes the Commission's 1994 decision to close the investigation is open to question.

"On the face of it their conclusion seems odd," said Ludford.

"There does seem to be good evidence of predatory pricing - the Commission has a case to answer." Ludford said a "dinosaur attitude" had until recently prevailed at the Commission's competition department, where she herself worked until 1985.

"I'm not taking sides yet on the case itself, but it's entirely fair for Paul Gregory to want an examination of [competition department] records," she said.

Microwave Ovenware Limited (MOL) had been winning large orders for Dynopack's microwave trays in the mid-1980s, with contracts to supply retail chains including Currys and Boots.

But when Dynopack launched a British subsidiary it signed an exclusive distribution deal with another firm, Thorpac, ending direct supplies to MOL.

MOL complained to the Commission in 1988 that Dynopack had targeted its customers with price cuts of up to 25% in order to force it out of business - as well freezing out its main source of parallel imports, Norwegian distributor Anders Lorange.

Six years later MOL was told no action would be taken because Dynopack's behaviour had had "no appreciable effect" on trade between member states.

Gregory insists that dozens of invoices in his possession addressed to firms in Belgium, Ireland, Germany and Spain prove the contrary.

Now Gregory is demanding to see the Commission's minutes of a 1989 meeting at which he maintains officials told MOL that a full investigation would go ahead.

"We were assured that trade between member states had been badly affected and there had been multiple breaches of articles 85 and 86 [now 81 and 82] on anti-competitive behaviour dominant position," said Gregory.

He also claims the EU executive failed to verify false evidence submitted by Dynopack during its preliminary enquiry.

European small business lobby UEAPME, which backed MOL's unsuccessful 1999 complaint to the European Ombudsman over the handling of the case, also wants to see results.

"I don't like to see small businesses treated differently and this was a big gang-up on a small firm that everyone thought would go away," said spokesman Garry Parker.

"But Paul Gregory and MOL didn't go away. We hope the Parliament will be able to shed some light on the case."

The director of a bankrupt company is mounting a last-ditch crusade to re-open a European Commission investigation into alleged anti-competitive behaviour by the multinational that drove him out of business in 1988.