$120,000 penalty against sports gear maker
Skins Compression Garments Pty Ltd, the supplier of Skins brand sports compression garments, has been penalised $120,000 after being found to have engaged in resale price maintenance, in contravention of the Trade Practices Act 1974.
Skins was also found to have engaged in misleading or deceptive conduct in advertising and promoting its products.
The case was instituted by the Australian Competition and Consumer Commission.
Misleading or deceptive conduct
The Australian Competition and Consumer Commission had alleged that Skins had claimed in advertisements:
- that it does not pay sports stars to wear or endorse Skins products and
- that it does not provide sports stars with products without payment,
when it did pay sports stars to wear and endorse its products and/or provided its products to sports stars to wear under 29 sponsorship agreements.
The representations were made in television, radio and print advertisements and on Skins websites.
Skins paid sports stars including cricketer Brett Lee and the Western Bulldogs, St Kilda and Melbourne Football Clubs, the Wests Tigers rugby league club and NSW Rugby Union (Waratahs) clubs to wear and endorse Skins products.
It also provided substantial quantities of Skins products to sports stars including to players representing Cricket Australia, Hockey Australia and Basketball Australia as well as players from AFL clubs, rugby league and union teams. In total, Skins agreed to pay approximately $750,000 and to provide Skins products valued at over $800,000 under the agreements.
The court ordered Skins to publish a corrective notice on its website, publish a corrective notice in B & T Weekly and broadcast a corrective advertisement on SBS.
Skins and its former managing director, Mr Jaimie Fuller, gave undertakings to the court not to engage in similar conduct in the future.
Resale price maintenance
The court declared that Skins engaged in resale price maintenance, in that Mr Christopher Warhurst, a representative of its South Australian agent:
- induced a retailer in Adelaide not to advertise Skins products at a discount on one occasion, and
- on two other occasions, attempted to induce the same retailer not to advertise Skins products at a discount.
The court declared that Mr Warhurst was knowingly concerned in the contravening conduct.
It ordered that Skins pay a penalty of $120,000 for its resale price maintenance conduct and that Mr Warhurst pay a penalty of $14,000 for his involvement.
Skins must provide a letter to its current retailers, agents and distributors about its conduct and to pay the ACCC's costs of the proceedings.
Skins has undertaken to the court not to engage in similar conduct in the future.
Skins, Mr Fuller and Mr Warhurst also agreed to provide the ACCC with enforceable undertakings to implement a trade practices law compliance program and undertake trade practices compliance training.
All of the orders finalising the proceedings were made by the court with the consent of the parties.
"The ACCC is very pleased with the outcome of the proceedings," ACCC Chairman, Mr Graeme Samuel, said today. "It should serve as a warning to business that the ACCC will take action in the public interest against those who engage in misleading advertising or resale price maintenance."
For media inquiries to the ACCC Chairman, Mr Graeme Samuel, please call Ms Lin Enright, ACCC Media, on (02) 6243 1108 or 0414 613 520.
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