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Advertising And Price (Relationship)

Volume 980: debated on Monday 3 March 1980

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asked the Secretary of State for Trade what conclusions emerged from the study initiated by the last Administration and the Advertising Association into the relationship between advertising and price.

The Advertising Association commissioned and published a study on advertising and price in May 1979, which has now been largely overtaken by the proposals in the Competition Bill for strengthening competition and reducing Government intervention.

Does my hon. Friend agree that investment in advertising is no different in principle from investment in production and distribution? Does he further agree that goods and services can benefit their producers only when they are sold, and that advertising is therefore an important and often essential part of that process?

My hon. Friend is right in many cases. Advertising may well play an important part in increasing competitiveness. That is not to say that all advertising is either effective or good, but it should not necessarily be seen as bad.