Business Comment: Good riddance to a conspiracy against consumers

Yippee. The price of a camcorder is coming down, and just in time for the summer holidays as well. Before anyone rushes to thank Margaret Beckett for scrapping recommended retail prices on electrical goods, however, they should call in at the Treasury and thank the man who is equally responsible.

The strong pound might be making life a misery for exporters but for those who import hi-fis, televisions, videos and the like, it is Christmas every day. Sterling's run - fuelled by the Chancellor's decision to allow the Bank of England to keep on raising interest rates - has slashed the cost of white and brown goods shipped in from the Far East. This, in turn, has allowed prices to fall by as much as 15 per cent and still leave enough room for distributors and retailers to rebuild their wafer-thin margins.

If the Monopolies and Mergers Commission report spelling the end of RRPs delivers savings to match, then it will truly deserve to rank alongside the magnetron and the cathode ray tube in the annals of consumer heroism.

There is no real defence for RRPs and it is surely right that they have gone the way of other price-fixing mechanisms governing the sale of books and over-the-counter medicines. The lack of price differentiation in electrical goods, other than between brands, is too widespread to assume that RRPs are other than the industry norm, whatever the big retailers may say. Anything which allows manufacturers to discriminate against retailers who ignore their price guides quickly turns into a conspiracy against the consumer. The counter-argument that RRPs act as a price guide against which shoppers then negotiate a discount is so much Toshiba.

But the extent to which they have kept retail prices higher than they otherwise would be is probably overdone. If prices are really being kept artificially high, then why is that retailers have to supplement the paltry margins they earn on electrical goods by forcing extended warranties down the throats of consumers?

The conclusion is probably that electrical retailing is a relatively inefficient sector. Why else imply that the product a consumer has just bought is second rate by selling him a warranty for when it breaks down?

The demise of RRPs will not mean price cuts across the board. But if it replaces poor service at a uniform price with good service at a range of prices, then it will be to the advantage of both the industry and its consumers.