"Abusive, arbitrary" tactics by parent company causing decline in
customer service and will force layoffs in stores, say dealers;
lawsuits demand freedom to sell competitors' products
MONTREAL, Oct. 21 /CNW/ - The troubled relationship between Bell Canada
and the majority of its Ontario-Quebec independent dealer network reached a
new low today. The dealers -- members of the Independent Communications Dealer
Association of Canada (ICDAC), representing over 80% of Bell's independent
dealer stores - formally launched new lawsuits against Canada's largest
communications company, claiming that Bell has broken its contract with the
entrepreneurial dealers in several ways.
"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 significant ways:
1. 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
2. Bell continues to develop better, more lucrative customer incentives
with its non-exclusive retailers - store operators like Wireless Wave,
Cabine Téléphonqiue, Best Buy and Future Shop - to the detriment of
its own exclusive dealers' competitiveness, and in contravention of
their existing contract with the company.
3. 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
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
"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. "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."
Nonetheless, the dealers say they're fighting back very reluctantly.
"We have not launched these lawsuits frivolously," said Ms. Ronca. "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 Ms. 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 is the voice
of independent owners of stores operating exclusively under the Bell, Bell
World, Bell Mobility, Espace Bell and Bell Mobilité banners, under contract
with Bell Distribution Inc., in Ontario and Quebec. ICDAC currently represents
over 172 locations, close to 2,000 employees and approximately $145 million in
annual revenues. (www.icdac.ca).
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