Key manufacturers and retailers have voiced concerns over the government’s decision this week to approve the £4.5bn deal which will give the newly formed company, ITV PLC, a 90% share of ITV advertising and control of 52% of all TV ads.
Trade and Industry Secretary Patricia Hewitt has ordered a three-year cap on rates and the new company will be expected to fund an independent adjudicator that will ensure negotiations with advertisers are fair.
However, advertisers fear ITV could still find a way to exploit its dominant position.
Ged Carter, general manager for retail marketing at the Co-operative Group, said: “We will be
monitoring the situation very closely. We regularly review our media usage and there are alternatives to terrestrial ITV.”
Unilever said it, too, would closely watch developments under the broadcaster’s new “quasi monopolistic position”. A spokesman said: “At the end of the day, there is a broader choice than ITV”.
Meanwhile, smaller manufacturers insisted they would have no hesitation in withdrawing support if rates rise.
Michaela Blunden, marketing director for Oriental Express Frozen Foods, said: “We spend around £5m a year on TV advertising. We would have to start looking at alternative media options if the cost of advertising on ITV went up.”
Karen Salters, marketing director of Beverage Brands which owns the popular WKD ready-to-drink brand, said: “Our media buying agency will be taking a hard look at what’s on offer. We would certainly not want to be held to ransom.”
Bagged salad specialist Florette said it was resigned to an advertising price rise in the future due to ITV’s “dominant position” in the market, although it declined to speculate as to how it might react.
Mark Bignell, head of broadcast at media buyer OMD, which buys advertising space for Walkers crisps and Vodafone, said: “The merger allows ITV a real position of dominance and gives them the potential to work in a monopolistic manner.”
A spokesman for Carlton said: “The terms of the merger protect advertisers.”