Four-wheel drive accessory manufacturers, MSA 4x4 Accessories Pty Ltd (MSA) and Offroad Animal Pty Ltd (Offroad Animal), have each separately admitted to engaging in resale price maintenance by instructing resellers to not advertise or sell their products below a specified price.
Between January and April 2022, MSA directed some of its resellers to not discount MSA products below a particular discount percentage, warning that if one or more resellers failed to comply with this direction it would not allow any discounting from the recommended retail price.
Between September 2020 and June 2023, Offroad Animal directed resellers and prospective resellers to not advertise its products below the recommended retail price.
Under Australia's competition law, it is illegal for suppliers to prevent, or attempt to prevent, resellers from advertising or selling goods or services below a specified minimum price. This conduct is known as resale price maintenance.
"Resale price maintenance prevents resellers from being able to compete with each other on price, leading to higher prices for consumers," ACCC Commissioner Liza Carver said.
"Businesses should be aware that the ACCC takes resale price maintenance very seriously and will take appropriate enforcement action against businesses that engage in this illegal practice."
"Suppliers cannot impose higher prices by setting the minimum prices that resellers charge or advertise. Similarly, suppliers should not give in to pressure from some resellers to impose minimum prices on other competing resellers, especially those with lower-cost online business models," Ms Carver said.
In the court-enforceable undertakings accepted by the ACCC, MSA and Offroad Animal have each committed to providing corrective notices to resellers advising that they are free to set their own prices, publishing corrective notices on each of their websites, and establishing, implementing, and maintaining a competition and consumer compliance program for three years.
Copies of the undertakings are available at: MSA 4x4 Accessories Pty Ltd and Offroad Animal Pty Ltd.
Note
Resale price maintenance occurs when suppliers:
- make it known they will not supply goods or services unless a reseller agrees to advertise or sell at a price below a specified minimum price;
- induce, or attempt to induce, resellers not to advertise or sell below a specified minimum price;
- enter into agreements, or offer to enter into agreements, for the supply of goods or services on terms including that the reseller must not advertise or sell below a specified minimum price;
- withhold supply of goods or services because a reseller, or a purchaser from the reseller, has not agreed to not advertise or sell below a specified minimum price, or has advertised or sold (or is likely to sell) at a price below a specified minimum price;
- use, in relation to goods or services supplied or that may be supplied, a statement as to price which is likely to be understood as the price below which the goods or services are not to be sold.
Businesses may lodge a notification of resale price maintenance conduct with the ACCC or apply for ACCC authorisation of proposed resale price maintenance conduct, which may be permitted if the likely public benefit from the proposed conduct outweighs the likely detriment from that conduct.
More information about resale price maintenance can be found at Minimum resale prices.
Background
MSA is a manufacturer of four-wheel drive accessories, specialising in drop slides and towing mirrors. MSA sells its products to independent retailers across Australia via its online store and a physical store at the Gold Coast, Queensland.
Offroad Animal is a manufacturer of four-wheel drive accessories, including bull bars, roof racks and lights. Offroad Animal sells its products directly to consumers via its online store and its physical stores across Australia, as well as to independent retailers across Australia.
