ACCC allows exclusive supply arrangement between Techtronic, Bunnings
The Australian Competition and Consumer Commission has issued an assessment not opposing notifications* lodged by Techtronic** and Bunnings*** relating to an exclusive supply arrangement for Ryobi products.
Under the notifications Bunnings will exclusively supply Ryobi products in its stores. Other hardware stores will no longer be able to supply Ryobi branded power tools or power garden equipment. Bunnings will also not acquire some power tool and power equipment brands from competitors of Techtronic which Bunnings considers are the same or duplicate to Ryobi products.
'To revoke the type of notifications lodged by Bunnings and Techtronic, the ACCC must be satisfied that the proposed conduct has the purpose, effect or likely effect of substantially lessening competition in a relevant market,' ACCC Chairman, Mr Graeme Samuel, said today.
'While Bunnings is a dominant retailer in the supply of power tools and Ryobi is a brand which a number of retailers have promoted over the years, there is not one power tool or power garden equipment brand which dominates the market. There are also a number of well established brands of power tools and power garden equipment which compete with Ryobi which non-Bunnings retailers' supply.
'Under the arrangement, Bunnings will continue to offer a range of power tool brands in its stores and will retain discretion over which brands of power tools it stocks.'
As with any notification, the ACCC may review the notifications lodged by Bunnings and Techtronic at any time should concerns arise.
More information regarding the notification and a copy of the assessment document will be available on the ACCC's website, by following the links to Public registers, Authorisations and notifications registers and Exclusive dealing notifications register.
*Section 47 of the Trade Practices Act 1974 prohibits conduct known as exclusive dealing. Broadly, exclusive dealing involves one trader imposing restrictions on another's freedom to choose with whom, in what or where it deals.
Businesses may obtain immunity for conduct that might risk breaching the exclusive dealing provisions of the Act by lodging a 'notification' with the ACCC.
The ACCC may revoke a notification for exclusive dealing conduct (other than third line forcing conduct) if it is satisfied that the conduct has the purpose, effect or likely effect of substantially lessening competition and the likely benefit to the public will not outweigh the detriment to the public from the lessening of competition.
** Techtronic Industries Australia Pty Ltd (Techtronic) lodged notification N93330 in which Techtronic proposes to supply Ryobi power tools and power garden equipment on condition that Bunnings will not acquire some power tools or power garden tools which were previously acquired from Techtronic's competitors and which Bunnings determines duplicate or are similar to the Ryobi power tools and power garden equipment.
Protection from legal action provided by this notification commenced on 29 February 2008.
*** Bunnings Group Limited (Bunnings) lodged notification N93331 in which Bunnings proposes to acquire Ryobi power tools and power garden equipment from Techtronic on condition that Techtronic will not:
supply Ryobi power tools and power garden equipment to competitors of Bunnings
supply Ryobi power tools and power garden equipment supplied to Bunnings to competitors of Bunnings or
supply Ryobi power tools and power garden equipment, comparable to Ryobi power tools and power garden equipment supplied to Bunnings, to competitors of Bunnings.
Protection from legal action provided by this notification commenced on 5 March 2008.
