The stormy affair of Bay and Landis

Retail How Landis and Bay finally reached an agreement.

It is an everyday fact of channel life that vendors sign up distributors.

But in recent months it became more than a big deal. It has taken from October 1997 for the vendor Bay Networks and the distributor Landis finally to sign a local agreement (PC Dealer, 13 May).

While Landis has caused a splash in the UK with its dogged - and if other distributors' reactions are anything to go by - unwelcome determination to expand its Dutch base, then Bay's response to the situation has been interesting, to say the least.

Since October, Bay UK has transformed itself from a vendor displaying the utmost reluctance to sign the distributor, to a manufacturer only too willing to expand its reach in the UK.

When the distributor landed in the UK late last year, it did not have local authorisation but began selling a range of products including Bay.

Soon afterwards, questions began to arise over the Treaty of Rome, which allows a European company to sell within the EU.

However, in an interview on 23 October, Graeme Allan, UK managing director at Bay, said: 'Being European doesn't give a company global rights.' He commented that the networking vendor still had to look at the plans, but remained steadfast on Landis' lack of rights to sell Bay in the UK.

Allan added: 'It will be an uphill struggle without our support.' But conceded: 'We are not hugely overdistributed at the moment.'

About this time, Landis UK managing director Roger Paul admitted to poaching staff with vendor-specific knowledge including Bay from other companies (PC Dealer, 5 November).

Later that month, Paul stated Landis had received the go-ahead for UK distribution from two Bay staff: Jon Axon, EMEA director of channel sales, and Elaine Webb, then pan-European channel manager. Paul stated: 'We haven't done all this without approval.'

On 1 December, after Landis continued to sell Bay kit, Allan became more explicit over the actions of the distributor. 'It is working slightly outside the European agreement and is actively pursuing business without country activation,' he said.

Allan stated: 'The Dutch parent will be getting a call from us. It goes against the contract and the agreement.' He added: 'There is a clause in the European agreement against solicitation and Landis has been soliciting.'

According to Allan, Landis had promised to come up with a business plan to allow it to sell in the UK but, as Bay MD said: 'It failed to do this.' Finally, Allan asserted: 'It will not get authorised.'

However, just over one month later, Allan had radically changed his view: 'Landis is part of Bay's pan-European agreement so it is legal and authorised to sell. This has always been the case.' Allan continued: 'We are not supporting Landis but it is important in Europe. We have to consider that.'

But on 22 January, a fax containing low-price Baystack products was released to resellers, and was met with derision from the vendor. But not because it didn't have a UK agreement. Allan said: 'The fax was not in a style we felt was appropriate.'

Allan justified the release by saying: 'It (Landis) can actively trade in Europe and is not grey marketing at all.' He added: 'We had a strong word with Landis.'

Matters were compounded by a photo featuring Webb and Paul and statements by Webb and Axon published on 23 January, saying resellers could purchase Bay kit from Landis and would be supported in both the UK and Europe.

However, it soon became clear the statements had been sent out without approval - or, as David Parker, area business manager at Bay, said: 'Nothing was written by Bay. I went back and told Landis it was incorrect.'

According to Parker, the photo was going to be used at a later stage after the audit had been completed and if Landis met the criteria.

However, Parker also admitted: 'Graeme and I have not seen a business plan since Christmas.'

Yet in Axon's statement he pointed out: 'The business plan promised by Landis in the UK was completed and received on schedule.' And Webb said in her statement, to resellers: 'We are happy for you to use Landis as your value add distributor of Bay Networks products.'

Axon later amended his statement from reading that Landis would be supported by Bay in the UK and Europe to just receiving support in Europe. He explained: 'The person who approved the statement didn't realise other people at Bay had made a couple of changes.' But as Paul himself said: 'As far as I was concerned it had been approved.'

On 13 February, Axon admitted there had been poor communication, but denied the UK office was under pressure from Europe to sign Landis due to any agreements signed in the territory.

He said: 'I don't think we have handled it in the best way possible and if there is potential to expand we have to decide if it is right. Elaine and I are to manage the UK on that decision.'

It seems strange, then, that over three months later, Parker, who announced that Landis had finally been activated in the UK, said: 'This is totally 100 per cent on my shoulders and it is my decision.'

So, after all this time, this chapter in Landis' and Bay's illustrious history has come to a close - but need it have been this long, laborious and confusing?