Hydroponic company admits attempt to prevent discounts

A hydroponic equipment manufacturer and importer, The Highlife Company (Aust.) Pty Ltd, has admitted to trying to prevent retailers from discounting some organic products it supplied.

Highlife has admitted sending a letter to its NSW CANNA dealers and resellers in which it alluded to its recommended retail price and also stated that Highlife would find it difficult to supply dealers which did not maintain healthy profit margins on its  CANNA Coco 50L products.

CANNA Coco is an organic growing medium for use in facilitating plant growth in hydroponic systems.

Following an Australian Competition and Consumer Commission investigation, Highlife has admitted that, in sending the letter it engaged in resale price maintenance, therefore breaching section 48 of the Trade Practices Act 1974.

Resale price maintenance involves a supplier stopping or seeking to stop a business (the reseller) from selling goods or services below a specified price.  Resellers have a right to sell and advertise goods and services at the price they choose.  Suppliers are prohibited from requiring resellers to sell or advertise below a specified minimum price.

In resolving this matter, Highlife has provided a court-enforceable undertaking to the ACCC to:

• not engage in conduct that constitutes resale price maintenance
• implement and maintain a corporate trade practices compliance program, and
• write to all of its NSW CANNA dealers advising them that Highlife can not control the price at which resellers sell CANNA products and that resellers are free to sell CANNA products at any price they choose.

"The ACCC considers resale price maintenance as a very serious offence", ACCC Chairman, Mr Graeme Samuel, said today.  "Suppliers must understand that if they attempt to set a minimum price below which resellers may not sell their products, they run a major risk of breaching the Act".