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Reverse auctions unfair, Europeans say

In a move endorsed by 11 European packaging groups, the European Aluminum Foil Assn. (Düsseldorf, Germany) has issued a white paper, "Reverse auctions: Still not a fair trade."

Pw 14834 E Commerce

"The hidden costs of 'lowest price at any price" are still a concern to many companies," the paper acknowledges. It says the European Commission has set up an Expert Group on Internet trading platforms to identify possibilities "to improve the reliability and value of e-business." This paper follows EAFA's November 2000 "good trading practice guidelines" that were quickly endorsed by other organizations in the packaging sector.

Too often, the paper says, "the result can be price-driven quality and often the consequences of this only become apparent when the materials come to be used and the waste due to late delivery, indifferent packing, poor machinability, inconsistency and low product quality leads to production stoppages and downtime."

Its good trading guidelines are now supported by organizations that represent more than 6ꯠ companies in Europe with total sales of nearly 90 billion€. "This unprecedented measure of consensus is symptomatic of the great damage and disruption being caused by the anonymous electronic reverse auction buying process." --AO

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