Official Ferrari grand prix merchandisers will be free to discount their goods if they wish following intervention by the Australian Competition and Consumer Commission. "The supplier of official Ferrari merchandise, Nice Man Merchandising (Australasia) Pty Limited, and its Melbourne agent, Concept Sports Pty Ltd, had circulated an agreement to two persons which sought their agreement to sell the products at the full recommended retail prices at both the wholesale and retail level, not to discount," ACCC Chairman, Professor Allan Fels, said today.
The recommended retail prices referred to were those published in a price list issued by Nice Man Merchandising (Australasia) Pty limited.
The ACCC wrote to Nice Man Pty Limited and Concept Sports Pty Ltd in late February 1997 expressing its concern that two terms contained in the Terms and Conditions-Ferrari Merchandise document issued by the companies breached the resale price maintenance provisions of the Trade Practices Act.
It is illegal for suppliers to seek agreement from persons for the supply of goods on terms that they will not sell the goods at a price less than a price specified, or to be specified, by the supplier.
Once the companies realised the seriousness of the ACCC concerns, they co-operated fully with the Commission and immediately agreed to undertake the remedial action sought.
In response to the ACCC's concerns, Concept Stores Pty Ltd, on behalf of Nice Man Merchandising (Australasia) Pty Limited, has written to the document's recipients advising that part of the document's terms breached the Act, and that they are not obliged to sell at these prices.
The ACCC acknowledged the companies' advice that the document was only sent to two persons, but was concerned that there may be a wider impression among resellers of the merchandise that these products were not to be sold below the retail prices recommended by Nice Man Merchandising (Australasia) Pty Limited. At the ACCC's request, Nice Man Merchandising (Australasia) Pty Limited has written to all its retail customers advising that they are not obliged to sell the merchandise at the retail prices recommended by Nice Man (Australasia) Pty Limited. Both companies have also provided written undertakings to the Commission that none of their customers will have supply terminated or be given supply on disadvantageous terms should they sell Official Ferrari Merchandise below the recommended retail price. Nice Man Merchandising (Australasia) Pty Ltd has also undertaken to implement a trade practices corporate compliance program.
"The conduct is serious, particularly in light of the pending Grand Prix event," Professor Fels said. "The ACCC is aware that suppliers try to maintain high prices for their products by discouraging retailers from discounting during short term special events such as the Grand Prix, as these events are generally followed by periods of heavy discounting.
"As well as artificially maintaining higher prices for consumers, resale price maintenance adversely affects retailers, who are often small businesses, from carrying on their business as they see fit".
"Suppliers must understand that if they attempt to stop discounting of their products by resellers, they run a significant risk of breaching the Act, and that the ACCC will be quick to take action."
Further information Professor Allan Fels, Chairman(06) 264 2829 or pager (016) 373 536 Ms Lin Enright, Director, Public Relations, (06) 264 2808
