A rift has developed between Amstrad Plc and one of its distributors, P&P Plc, leading to the termination of the five year distribution agreement between the two. It appears that the two could not agree on the nature of the distribution business. P&P, which sees itself in the business of support and service rather than in raw distribution – otherwise known as box-shifting – was unable to agree to Amstrad’s proposals regarding the Generation 3 price promotions. An Amstrad spokesman agreed that the promotion involved taking substantial quantities of stock in order to get price protection from the price cut, but declined to offer further details. Amstrad managing director Barry Young said P&P did not feel able to get behind the promotion with volume orders and accordingly I can no longer consider them to be sufficiently committed to our business and have served notice on them. In reply, Ian Osborne, head of P&P Distribution commented that pressures to continue to take high volumes of product at low net profit margins and the need for P&P to rationalise its product set to increase focus, have led to the termination of the distribution agreement. The two seem to be in profound disagreement on demand for Amstrad product.
