RM Hall required to pay penalties totalling $95,000 for resale price maintenance

Penalties totalling $95,000 have been imposed on RM Hall Pty Ltd and its directors, Mr Peter Hall and Mr John Hall, for engaging in resale price maintenance in relation to Florence Sculture D'Arte Armani figurines supplied by the company to a number of dealers throughout Australia. 

The penalties were imposed by Justice Mansfield of the Federal Court, Adelaide, following Australian Competition and Consumer Commission action.

In 2003 RM Hall entered into approximately 120 dealership agreements for the supply of the Armani figurines.  Fourteen dealers were issued with catalogues which, together with the dealership agreements, contained statements of price such that the dealers would be likely to have understood that they could not sell or advertise the figurines below that price. 

In 2002 RM Hall also entered into dealership agreements with a number of retail outlets operated by Westminster Lace Pty Ltd, and issued Westminster Lace with price lists containing recommended retail prices for Armani figurines.

Westminster Lace subsequently advertised and sold the Armani figurines at a 20 per cent discount off the recommended retail price and, as a consequence, received a letter from RM Hall which was critical of Westminster Lace's discounting activity and advised that RM Hall would be reviewing its dealership strategy.

By issuing the price list and sending the letter, Westminster Lace was likely to have understood that the figurines were not to be advertised or sold below the recommended retail price specified by RM Hall.

With the consent of the parties, Justice Mansfield:

declared that RM Hall's conduct breached the resale price maintenance provisions of the Trade Practices Act 1974 imposed the following penalties against the company and its directors:

• RM Hall $65,000
• Mr Peter Hall $10,000
• Mr John Hall $20,000
• granted injunctions that prevent RM Hall, Mr Peter Hall and Mr John Hall from inducing, or attempting to induce, any person not to advertise or sell decorative goods supplied by RM Hall below a specified price, and
• ordered that the parties undertake to establish and/or attend trade practices compliance training.

ACCC Chairman, Mr Graeme Samuel, said today that the ACCC regarded such conduct as serious and that suppliers engaging in this conduct who come to the attention of the ACCC can expect rigorous enforcement action which may involve a substantial monetary penalty for the offending parties.

Mr Samuel noted that RM Hall's directors, Mr Peter Hall and Mr John Hall, had co-operated with the ACCC in its investigation and settlement of the matter but reinforced comments he made after the recent Dermalogica* case heard in Melbourne that "suppliers who attempt to maintain a prestige image for their products by preventing their resellers discounting should be aware that such a practice is a perilous one".   

* See MR 52/05 10 March 2005