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Euretco Seizure May Jeopardize Union and United Bicycles Joint Venture

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NIEUWLEUSEN, Netherlands (October 3) – Dutch buying association for IBD’s, Euretco has seizured the possessions of Dutch bicycle maker Union for a total amount of about NLG 1 million (US$418,000; EUR454,000). Euretco’s claim is based on the distribution of bicycles made by Union for Euretco to non-Euretco IBD’s. A Dutch court recently announced that the […]

NIEUWLEUSEN, Netherlands (October 3) – Dutch buying association for IBD’s, Euretco has seizured the possessions of Dutch bicycle maker Union for a total amount of about NLG 1 million (US$418,000; EUR454,000). Euretco’s claim is based on the distribution of bicycles made by Union for Euretco to non-Euretco IBD’s. A Dutch court recently announced that the Euretco claim is justified and that the buying association can maintain its NLG 1 million claim. Euretco with its ‘Fietsspecialist’ shop formula is Holland’s biggest bicycle retailer and next to that also Union’s biggest client. Euretco MD Ron Te Riele recently expressed his anger in a newspaper about Union’s actions and he called the bicycle maker an ‘unreliable partner’. The claim made by Euretco will have a great impact on the joint venture between Union and Belgian United Bicycles and could even jeopardize it. Recently the Dutch bike maker announced that its production will be moved from the factory in the northeast of the Netherlands where they have been made since 1904 to the United Bicycles facility in Maasmechelen, Belgium. The outdated Union facility will be closed, which means among other a hefty bill (estimated at NLG 4 million (US$1.68mn;EUR1.81mn) for polluted soil. Locally it means unemployment for most of the 120 Union factory staff. They all got the formal offer of a new job at the Belgian factory, which would mean a 300 km move. Most employees consider a move worse than a layoff. The unions prefer a bankruptcy file plus a restart. Union sells an estimated 60,000 bicycles a year under its own Union brand exclusively through dealers, and the old factory also made a similar number of bicycles under various private labels for retail chains. A sales and marketing office will stay in the Netherlands to handle the dealer sales. Union owner Winning Wheels has founded a new holding company for Union in which both Winning Wheels and United Bicycles hold 50% of the shares. (JO/OB)

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