Rip off Britain is back, it appears. The surprise finding of an eBay poll of its online traders is that almost 50% have been prevented by the manufacturers of consumer brands from selling their goods at a discount to high street shops. It doesn\'t stop there. Virtually the same percentage said that they had experienced suppliers trying to stop them from selling goods online. Flog our shoes in your high street shop, yes, that\'s fine. But do so over the internet, especially through a site like eBay or Amazon is no go. eBay was not expecting this result. Nor were MPs, civil servants and the business trade bodies presented with the findings at the House of Commons last week. The Federation of Small Businesses is considering polling its more traditional bricks and mortar members to see if they have been bullied in a similar way.

You need to go back more than a decade for the original rip off Britain campaigns, where the likes of Tesco and Asda took on Nike, Levi and the perfume brands in an attempt to break their control of where their goods could be sold and country pricing. These goods were often being imported from outside the European Union into the UK and costly and protracted legal battles ensued. The results can be seen in the aisles of popular chains like TK Maxx and Matalan as well as the supermarkets.

What should not be an issue is the free flow of goods already within Europe\'s borders. They are covered by the Treaty of Rome and policed by the European courts. But business owners contacting this column in recent days, suggest that brands are still throwing their weight around. Their common war stories include having goods bought at a discount in one country routinely stopped at borders at the request of brand owners as customs officials carry out their counterfeit inspections. Even if the goods are genuine the manufacturers have two weeks to substantiate their claims. If this deadline is not met, traders can find themselves going through local courts in an attempt to get their goods released. Another a recent example of brand misbehavior was the decision by one manufacturer to tell its UK distributors that their supplies would be withheld if they tried to take advantage of the fall in value of sterling compared with the euro and sell goods to customers on the Continent.

It is clear that brands are protecting their margins and relationships with existing distributors and retailers. Free trade and the rise of the internet makes this difficult to do. There are too many physical shops but the process of shifting long standing trading relationships from the high street online will take time. Meanwhile, those operating at the online front line face being crushed. What the brands worry about is that it only takes one of their main distributors in Germany to overstock and then offload the goods to a middle man to suddenly find truck loads of their products flooding and undercutting their UK distributors.

Taking action against the import/export companies that smooth this flow of trade is one thing. It is another to apply heavy- handed tactics further down the supply chain to the small, independent traders operating through websites.

One health and beauty products retailer from the South East told eBay: "I sell their goods at a lower price than they do on the high street, so they threaten small businesses like mine because they know we\'re limited in how much of a fight we can put up against them." Another small retailer, specialising in sports equipment and based in Yorkshire, was more explicit: "We have four or five suppliers that would threaten future orders if we sold online. One company actually dictates a price to sell their products at, and if we are seen to sell lower, then supply has been restricted until we explain our position and resolve it. Others only allow us to sell on our own website, not on online market places, which makes life a lot harder for consumers because they want to be able to shop around easily. Some suppliers can be pretty intimidating - they know the power they have over small companies like ours."

eBay now plans to petition its 44m users across Europe to see what appetite there is to lobby the European Commission. Given eBay\'s growing influence the brands legal teams will be preparing for a bruising battle.

By Richard Tyler

UK Daily Telegraph

22 Jun 2009