The Federal Court Melbourne today made orders against The Fitness Generation Pty Ltd and its National Sales and Marketing Manager Commercial Division, Martin Cowling, restraining them for three years from engaging in resale price maintenance in respect of fitness equipment, and from attempting to enter into a price fixing arrangement between retail sellers of fitness equipment in Australia.
The company was also ordered to implement a trade practices corporate compliance program, publish an apology notice in two national fitness journals, and send a letter to all distributors of its products advising of the orders granted by the court.
The Australian Competition and Consumer Commission instituted proceedings after The Fitness Generation issued a letter to its retail distributors - with whom it also competes in the same market - offering supply of Monark fitness equipment.
The letter enclosed a retail price list for the Monark products on offer and stated The Fitness Generation would closely monitor retail prices and would not look favourably upon discounting. Those retailers found discounting would most likely not enjoy a long term relationship with The Fitness Generation.
The letter also advised that The Fitness Generation would be selling the Monark equipment at the retail prices as per the enclosed price list. The letter was signed by Mr Cowling.
The ACCC alleged that such conduct constituted a contravention of section 48 of the Trade Practices Act which prohibits resale price maintenance, and section 45 which prohibits the fixing, controlling or maintaining of the price of goods or services by competitors.
The ACCC acknowledge that both the company and Mr Cowling cooperated to quickly resolve the matter, thereby saving the ACCC the time and expense of litigation.
ACCC Acting Chairman, Allan Asher, said today the Commission regarded the breaches as serious. "Suppliers must understand that if they attempt to stop discounting of their products they run a significant risk of breaching the Trade Practices Act. The ACCC will be quick to take action against businesses engaging in this type of conduct, regardless of whether they are big or small!".
By taking the action the ACCC aimed not only to make The Fitness Generation aware of its obligations but also to ensure its wholesale customers were aware of their rights with respect to discounting and competing.
