MONTREAL – Claiming “abusive, arbitrary” tactics by parent company Bell Canada that have caused a “decline in customer service and will force layoffs in stores,” Bell Canada’s independent retailers have launched new lawsuits against the big telco.
The dealers – members of the Independent Communications Dealer Association of Canada (ICDAC), and representing over 80% of Bell’s independent dealer stores – say that Bell has broken its contract with the dealers in several ways, according to a press release the group issued yesterday.
“This is the result of a downward spiral in our relationship that has escalated under Bell’s current management over the last three years,” said Doris Ronca, president of ICDAC, and owner of two Bell World stores in Montreal, Quebec. “Years of Bell’s mismanagement has resulted in losing customer and investor brand loyalty and falling from first to third place in the wireless marketplace. Now, Bell is punishing its own, exclusive dealer channel by not honouring agreements and systematically destroying our competitiveness, reputations and the value of our businesses that we have built, some of us for over 20 years.”
Two identical lawsuits, launched today in Ontario Superior Court and Quebec Superior Court, claim that Bell has breached on its contract agreement with the dealers in three ways, quoted below from the release:
* The company has ignored a commitment finalized in March 2008 to leave dealers’ fees and commissions untouched until June 2009. Bell is now refusing to pay compensation to dealers when their customers purchase replacement equipment and renew service contracts, as well as reducing other new customer commissions during the critical fourth quarter of the year. These fees are the essential lifeblood of dealers’ ongoing operations.
* Bell continues to develop better, more lucrative customer incentives with its non-exclusive retailers – store operators like Wireless Wave, Cabine Téléphonique, Best Buy and Future Shop – to the detriment of its own exclusive dealers’ competitiveness, and in contravention of their existing contract with the company.
* Bell’s Direct Marketing has and continues to offer better incentives and deals to customers than its existing dealer chain – further eroding the dealers’ competitiveness and customer loyalty to their stores.
The lawsuits are claiming over $200 million in damages against Bell, as well as a reversal of all competitive measures listed in the suit, and a commitment to honour the current contract. The lawsuits also seek the right for the dealers to stock and sell products from competitors like Telus, Rogers and other, new entrants to the telecommunications marketplace in Canada.
“Carrying other brand names is one of the few options we have to maintain any degree of competitiveness, maintain revenues to pay our employees and maintain value in our businesses,” said Rick Umbrio, ICDAC’s vice-president and a Bell dealer with three stores in Ontario. “It’s a shame that it’s come to this, but if Bell continues to renege on its agreements and make bad marketplace decisions, we’re left with few alternatives.”
As the prime interface between Bell and its corporate and consumer accounts, the members of ICDAC are shocked that the company has allowed relations with their dealers to continue to deteriorate – especially with the deadline of Bell’s takeover by the Ontario Teachers’ Pension Fund coming in December, reads the release.
“We believe that senior executives at Bell stand to gain huge personal bonuses when the takeover succeeds, if certain financial targets are met,” said Umbrio, in the release. “And what better way to improve your bottom line than by illegally cutting dealers’ commissions and fees, and firing thousands of employees, which they’ve done over the last few months. It’s hard not to connect the dots.”
“We have not launched these lawsuits frivolously,” said Ronca, in the release which says a couple of times the lawsuits were launched “very reluctantly.”
“For over three years, we have pleaded with Bell, at every level, to listen to us, to negotiate in good faith, to respect commitments, to step back and look at the deterioration in the company’s business and reputation with customers. And in each case, they have ignored, stonewalled and treated us with contempt basically because we are a ‘captive’ exclusive distribution channel for them,” added Ronca.
“In the final analysis, we have to do whatever we can to protect our businesses, our employees and our customer relationships built over 20 years of partnership with Bell. If that means taking Bell to court, then we’re determined to win.”
The Independent Communications Dealer Association of Canada says it is the voice of independent owners of stores operating under the Bell, Bell World, Bell Mobility, Espace Bell and Bell Mobilité banners, under contract with Bell Distribution Inc., in Ontario and Quebec. ICDAC represents over 172 locations, close to 2,000 employees and approximately $145 million in annual revenues, according to the release.
