Caravanning Queensland’s proposed ‘loyalty program’ raises competition concerns

17 June 2020

The ACCC proposes not to allow plans by Caravan Trade and Industries Association of Queensland (Caravanning Queensland) to offer a ‘loyalty program’ to its members.  Under the program, Caravanning Queensland would offer discounted fees to exhibit at its own caravanning trade shows on the condition that members do not take part in competing events.

The ACCC intends to revoke an exclusive dealing notification lodged by Caravanning Queensland about the ‘loyalty program’ because it raises serious competition concerns.

“We disagree with Caravanning Queensland’s claim that this is simply a loyalty program for its members,” ACCC Commissioner Stephen Ridgeway said. 

“Loyalty programs should reward members for purchasing more of your products or services, rather than linking the reward to an agreement not to purchase your competitors’ products or services.”

In a draft notice issued today, the ACCC proposes to revoke Caravanning Queensland’s notification because it is satisfied that the proposed ‘loyalty program’ has the purpose and effect of substantially lessening competition in the supply of caravanning exhibition event services in the South East Queensland region.

The ACCC is also satisfied that the likely benefit will not outweigh the likely detriment to the public from the conduct.

Caravanning Queensland has a substantial membership base comprising more than 85 per cent of caravan manufacturers and is the organiser of major caravanning exhibition events in Brisbane and the surrounding region, including the must-attend Brisbane Supershow event for caravanning retailers.

“As a result, smaller caravanning event organisers or possible new entrants are unlikely to be able to match the deep discounts to persuade members to give up their Caravanning Queensland discount.”

“Additionally, consumers are likely to have fewer opportunities, or have to travel much further, to attend caravanning exhibition events where they can easily compare features and prices of a broad range of recreational vehicles, and track down special deals,” Mr Ridgeway said.

Caravanning Queensland and interested parties can comment on the draft notice before the ACCC makes a final decision.  Submissions are due by 10 July 2020.

Further information, including the exclusive dealing notification and details about how to make a submission are available on the ACCC’s public register at Caravan Trade and Industries Association.

Background

Exclusive dealing occurs when one person trading with another restricts the other’s freedom to choose with whom, in what or where it deals.  Exclusive dealing can take a number of forms, including the supply of goods or services, or the supply at a particular price or discount, on condition that the buyer will not acquire, or will limit the acquisition of, goods or services from a competitor of the supplier. 

Exclusive dealing is only a breach of the Competition and Consumer Act (2010) if the restriction is likely to have the purpose, effect or likely effect of substantially lessening competition.

Caravanning Queensland lodged the notification with the ACCC on 3 October 2019 and later revealed its initial plans would be to offer a 50 per cent discount on site fees for its ‘Let’s Go Brisbane’ event to members who participate exclusively in Caravanning Queensland events throughout the entire year.

Once an exclusive dealing notification is lodged with the ACCC, protection for the notified conduct beings automatically. 

In this case, Caravanning Queensland agreed to not commence the notified conduct until after the ACCC had assessed its notification. The ACCC has relied on information gained through a public consultation process and from internal documents provided by Caravanning Queensland.  The ACCC may only revoke an exclusive dealing notification where it is satisfied that the notified conduct:

  1. has the purpose, effect or likely effect of substantially lessening competition, and
  2. in all the circumstances, will not result in likely public benefit which would outweigh the likely public detriment.

Before issuing a revocation notice, the ACCC must issue a draft notice setting out its reasons for proposing to revoke the notification.

Release number: 
119/20
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