Heating product distributor Bromic admits to resale price maintenance

16 October 2019

Bromic Pty Ltd, a national distributor of outdoor heating products, has admitted to engaging in resale price maintenance when it introduced a ‘minimum advertised pricing’ policy, in a court enforceable undertaking accepted by the ACCC.

Bromic’s ‘minimum advertised pricing’ policy, which it introduced in late January 2018, required retailers not to advertise Bromic branded heating products for sale at a price cheaper than a price determined by Bromic, and contained potential sanctions for retailers who did not comply, under a ‘three strikes’ policy.

Bromic stopped referring to and enforcing the policy after April 2018 but did not take any steps to communicate to its retail distributors that the policy was no longer in effect. 

“While Bromic stopped using and enforcing the minimum advertised pricing policy, it failed to inform retailers who may have continued to advertise products at the prices set by Bromic in the belief that the policy was still in effect,” ACCC Commissioner Sarah Court said.

“Manufacturers and suppliers are reminded that they are not allowed to dictate minimum prices to retailers, who are entitled to advertise and sell products at discounted prices if they choose to do so.”

“Resale price maintenance is illegal because it stops retailers from competing with each other on price, which could lead to consumers paying more than they should,” Ms Court said.

Bromic has undertaken to advise retailers that its minimum advertised pricing policy is no longer applicable and to ensure Bromic executives and staff receive practical legal training on the requirements of the Competition and Consumer Act 2010, including resale price maintenance.

Bromic’s undertaking is available on the ACCC’s public register at Bromic Pty Ltd.

Notes to editors

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. 

Resale price maintenance is strictly prohibited by the Competition and Consumer Act and is not subject to a substantially lessening competition test.

More information about resale price maintenance can be found at Imposing minimum resale prices.

Background:

Bromic is a distributor of outdoor gas heating products that operates nationwide through a network of 29 authorised retailers.

Bromic has cooperated with the ACCC’s investigation.

Release number: 
192/19
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