The Australian Competition and Consumer Commission has instituted legal proceedings in the Federal Court, Adelaide, against RM Hall Pty Ltd, Westminster Retail Pty Ltd and directors of each of the companies for alleged resale price maintenance in contravention of section 48* of the Trade Practices Act 1974.
RM Hall is the exclusive Australian agent and importer of Florence Sculture d’Arte figurines, known as Armani figurines. It distributes the figurines to approximately 300 wholesale customers, of whom 100 have entered into dealership agreements with RM Hall.
Westminster operates, and is the franchisor, of a number of retail stores throughout Australia which sell lace, bed linen and other giftware. Most of its stores and franchisees have retailed Armani figurines and, at various times, been a party to a dealership agreement with RM Hall.
The ACCC alleges that RM Hall:
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by entering into dealership agreements and issuing price lists containing recommended retail prices for Armani figurines, attempted to induce its dealers to not advertise or sell Armani figurines at a price less than the price specified by RM Hall in the price list
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provided its dealers with a price list containing recommended retail prices and a catalogue containing retail prices, and by so doing, used a statement of price that was likely to be understood by its dealers, in the circumstances of each dealership agreement, as the price below which Armani figurines were not to be advertised or sold
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made it known to Westminster and a Westminster franchisee that it would not supply them with Armani figurines unless they agreed not to advertise or sell the figurines at a price less than the price specified by RM Hall; and
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refused to supply Armani figurines to the Westminster franchisee, except on disadvantageous terms, because the franchisee had not agreed not to advertise or sell the figurines at a price less than the price specified by RM Hall.
The ACCC alleges that Westminster:
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entered into franchise agreements with two of its franchisees being an agreement one of the terms of which was that each of the franchisees would not advertise or sell goods supplied by Westminster at a price less than its specified price
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entered into franchise agreements and issued Stock Supply Procedures and invoices specifying the retail price of the goods, and by so doing, attempted to induce the franchisees not to advertise or sell the goods at a price less than the price specified by Westminster
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issued the franchisees with stock supply procedures and invoices specifying the retail price of the goods, and by so doing, used a statement of price that was likely to be understood by the franchisees as the price below which the goods supplied by Westminster were not to be advertised or sold
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communicated to one of the franchisees that it must adhere to Westminster's standard selling price, and by so doing, attempted to induce the franchisee not to advertise or sell the goods at a price less than the price specified by Westminster
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entered into an agreement with one of the franchisees which specified a formula for price discounting being an agreement one of the terms of which was that the franchisee would not advertise or sell goods supplied by Westminster at a price less than its specified price
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sent a memorandum to franchisees permitting certain discounting and, by so doing, it used a statement of price that was likely to be understood by the franchisees as the price below which the goods supplied by Westminster were not to be advertised or sold.
In addition, the ACCC alleges that two of RM Hall's directors, Mr Peter Hall and Mr John Hall, and two of Westminster's directors, Mr Kenneth Wade and Ms Heather Wade, were directly or indirectly knowingly concerned in, or party to, the alleged contraventions of the Act.
The ACCC is seeking declarations, injunctions, pecuniary penalties together with probation orders relating to trade practice compliance programs and seminars.
A directions hearing for the matter is listed for 16 September 2004 at 9 am in the Federal Court, Adelaide.