Vitamin maker tries to ban online sales

NEWS Vitamin manufacturer, Solgar, could be breaking European law by refusing to supply a discount Internet retailer, according to a leading UK lawyer. The row blew up after the manufacturer, part of American Home Products, refused to supply its products to UK start-up Nutravida.com. The site offers vitamin supplements at discount rates - up to 40 per cent below high-street prices. Trevor Millett, Nutravida CEO, said: "Solgar's MD never explicitly said that he wouldn't deal with us because we cut prices, but it was fairly obvious." Nutravida bypassed the problem by purchasing Solgar products from other retailers, but on 2 December Solgar's managing director, Gerald Eva, sent a letter to the company's retailers asking them not to deal with Nutravida. The letter - obtained by Silicon.com - states: "I would like to stress that Nutravida has no authority to offer Solgar. "Further, Nutravida is purchasing Solgar from the retail sector. We are categorically not supplying this company. I have called the managing director of Nutravida.com and requested he cease and desist from offering Solgar. Our retailers can help by not selling supplements to anyone who is not a bona fide member of the public." According to Nutravida's Millett, the move is typical of "old-fashioned" vitamin manufacturers. He claimed: "The market at the moment is in a form of shock as they realise the speed at which the Internet is changing the way they've done business. "They [manufacturers] find it extremely difficult when dealing with an Internet retailer such as ourselves to have very little control over the retail price at which their product is sold. This is not a situation that they're used to dealing with," Millett added. Stephen Mason, barrister with UK law firm Kaltons, said the manufacturer cannot refuse to supply Nutravida because of price. "It appears that Solgar wish to maintain the retail prices of their products. They are in danger of breaching EU Competition Law if they try to
force retailers to go along with their requests," he said. According to a spokesman for the Office of Fair Trading, manufacturers can suggest a recommended retail price (RRP) for products, but can't enforce it. From 1 March next year when the UK Competition Act 1998 comes into force, any company in breach of the law could face a fine of up to 10 per cent of its UK turnover. Millett said Nutravida is waiting for a response to its objections from Solgar before taking the matter further. A Solgar spokeswoman confirmed it sent the letter to Nutravita, but refused to comment further.