Further resale price maintenance win for ACCC

22 March 2007

The Federal Court of Australia has ordered a penalty of $125,000 for anti-competitive conduct against Tooltechnic Systems (Aust) Pty Ltd, the importer of Festool power tools.

Justice Kiefel in the Brisbane court made the orders by consent in proceedings instituted by the Australian Competition and Consumer Commission. The court declared that Tooltechnic engaged in resale price maintenance in 2001 and 2002. 

Resale price maintenance is prohibited under section 48 of the Trade Practices Act 1974, and occurs where suppliers prevent or discourage retailers from discounting their prices.

The decision follows the record $3.4 million penalties against the Jurlique cosmetics companies* in February this year, also for RPM.

The ACCC took action in relation to conduct by two now former Tooltechnic sales managers, who went too far in implementing new dealership agreements by attempting to discourage retailers from discounting from recommended prices.

In settling the proceedings, Tooltechnic consented to court orders against it and also gave a court-enforceable undertaking that it would implement a trade practices compliance program.

The company's managing director, Mr Holger Schulz, acknowledged that his training and supervision of the sales managers may have contributed to the contraventions occurring, and he gave an undertaking that he would not engage in similar conduct.

The court also granted injunctions against further similar conduct by the company and ordered it to pay $25,000 in costs.

"This is a case of a poorly implemented change to dealership agreements and unsatisfactory training and supervision resulting in a breach of the law. The company might not have set out to break the law, but it didn't pay enough attention to getting things right," ACCC Chairman, Mr Graeme Samuel, said.

"I'm pleased to say that Tooltechnic realised their mistake and cooperated early. That saved them and us and lot of time and money in getting this resolved.

"This decision is a warning to companies – make sure your business strategies don't sail close to the wind, and make sure your staff are properly trained and supervised.

"RPM stops retailers from competing on price if they wish, and so it stops consumers from getting the best price they can. This is one of a number of recent wins by the ACCC on RPM, and I can assure the business community we have plenty more in our sights," Mr Samuel said.

Release number: 
MR 076/07
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