Bathroomware brand, Nero Bathrooms International Pty Ltd, trading as Nero Tapware, has admitted it was likely to have engaged in resale price maintenance by withholding supply of its products from a small independent building supplies retailer when that retailer failed to raise its advertised prices.
Nero admitted that, in March 2020, it made statements to a retailer that the retailer’s prices were too low, that it should not advertise Nero products at a price lower than 15 per cent off the recommended retail price (RRP), and that it should raise its online advertised prices so those prices were not lower than 15 per cent below the RRP. When the retailer did not raise its prices, Nero stopped supplying them.
It is illegal for manufacturers and suppliers to attempt to stop retailers from discounting their prices below a specified price, such as the recommended retail price.
“Nero has acknowledged that it was likely to have breached the law prohibiting resale price maintenance when it communicated a ‘minimum price’ to a retailer,” Deputy Chair Mick Keogh said.
“Resale price maintenance conduct prevents retailers from competing on price, and this means consumers pay more than they should.”
“In this case, the conduct was limited to a single retailer, and there was no direct consumer harm because that retailer did not comply with Nero’s pricing directions,” Mr Keogh said.
Nero has provide a court-enforceable undertaking to the ACCC, in which it has committed to advising all Nero retailers that they are free to set their own prices, and to ensure relevant Nero staff receive compliance training on their obligations under the Competition and Consumer Act, including the prohibition against resale price maintenance. A copy of the undertaking is available at Nero Bathrooms International Pty Ltd.
Nero has co-operated with the ACCC throughout its investigation.
Note to editors
Resale price maintenance is illegal and occurs where a supplier prevents, or attempts to prevent, independent retailers from advertising or selling products below a specified price.
Resale price maintenance occurs when manufacturers or suppliers:
- make it known they will not supply unless a distributor or retailer agrees to advertise or sell at a price not less than a specified minimum price;
- induce or attempt to induce the retailer not to advertise or sell below a specified minimum price;
- withhold supply of goods or services because the distributor or retailer has advertised or sold at a price below a specified minimum price.
Businesses proposing to engage in resale price maintenance must lodge a resale price notification with the ACCC. Businesses can seek protection from action for resale price maintenance by the ACCC if the public benefit likely outweighs the public detriment.
More information about resale price maintenance can be found at Imposing minimum resale prices.
Nero is a national supplier of Nero branded bathroom products, supplying over 1000 independent chain stores across Australia.
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