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Resale price maintenance - Aus company did it for months.

Publication: 
Editorial Staff
chiefofficersnet

It takes a special kind of b***s to continuously break one of the most widely known business laws in Australia and to keep doing it for months. Worse, when it stopped breaking it, it didn't tell anyone it was doing so and to its customers continued to act as if it was in force. What is it? Resale Price Maintenance (yes, the very thing that kept Amazon out of Aus for so long because book publishers were exempted from the law).

Bromic Pty Ltd, a national distributor. that operates nationwide through a network of 29 authorised retailers. of gas powered outdoor heating products, has admitted to engaging in resale price maintenance when it introduced a ‘minimum advertised pricing’ policy, in a court enforceable undertaking accepted by the Australian Competition and Consumer Commission.

Bromic’s ‘minimum advertised pricing’ policy, which it introduced in late January 2018, required retailers not to advertise Bromic branded heating
products for sale at a price cheaper than a price determined by Bromic and contained potential sanctions for retailers who did not comply, under a
‘three strikes’ policy.

Resale price maintenance occurs when manufacturers or suppliers:

* make it known they will not supply unless a distributor or retailer agrees to advertise or sell at a price not less than a specified minimum price
* induce or attempt to induce the retailer not to advertise or sell below a specified minimum price
* withhold supply of goods or services because the distributor or retailer has advertised or sold at a price below a specified minimum price.

Resale price maintenance is strictly prohibited by the Competition and Consumer Act 2010 and is not subject to a substantially lessening competition
test.

Bromic stopped referring to and enforcing the policy after April 2018 but did not take any steps to communicate to its retail distributors that the policy
was no longer in effect.

“While Bromic stopped using and enforcing the minimum advertised pricing policy, it failed to inform retailers who may have continued to advertise
products at the prices set by Bromic in the belief that the policy was still in effect,” ACCC Commissioner Sarah Court said. “Manufacturers and suppliers are reminded that they are not allowed to dictate minimum prices to retailers, who are entitled to advertise and sell products at discounted prices if they choose to do so.”

“Resale price maintenance is illegal because it stops retailers from competing with each other on price, which could lead to consumers paying more
than they should,” Ms Court said.

Bromic has undertaken to advise retailers that its minimum advertised pricing policy is no longer applicable and to ensure Bromic executives and staff
receive practical legal training on the requirements of the Competition and Consumer Act 2010, including resale price maintenance.

The measures against resale price maintenance have often been in the news in particular with reference to offshore discounters selling into Australia whilst maintaining at best a token presence in Australia. For example, Amazon.com registered Amazon.Com.Au several years ago - but registered it to an address in the USA and operated the service from outside Australia. Initially, it did not include books in its "Australian" service but it did include e-books. The reason for that is that, under the Act, book publishers were exempted and were fully authorised to set a minimum price at which books would be sold.

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