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On 25 November, 2009 the ACCC accepted a request to vary the undertaking provided by Spray Pave Australia Pty Ltd (SPA) on 7 July, 2009. The variation amends the dates on which SPA's advertising first appeared on certain websites.
Yarrabee Investments Pty Ltd (Yarrabee Investments) carries on the business of selling furniture products, including bedding products, through two retail stores in Victoria under the trading names Leather Lounges Direct and Dekabu Leather.
International Beauty Supplies (IBS) carries on the business of importing, distributing, wholesaling and retailing beauty products in Australia.
Yuwah Holdings Pty Ltd (Yuwah) employs all staff involved in the business of IBS and provides administration services to IBS.
IBS supplies goods to 28 distributors across Australia who on-sell IBS goods to professional salons.
In February 2008 IBS:
entered into Distributor Agreements for the supply of goods on standardised terms, one of the terms of which was that the distributor would not sell the goods at a price less than a price specified by IBS as follows:
‘Prices 5(3) - The Buyer will sell the Goods at the Suppliers published wholesale price including GST with the recommended retail price for those businesses detailed in item 3(a) who may sell non-professional Goods to consumers.’
sent a letter to distributors notifying that IBS would not supply goods unless the Distributor Agreement was signed, thereby making it known that IBS would not supply goods to distributors unless they agreed not to sell IBS goods at a price less than a price specified by IBS; and
provided distributors with price lists and catalogues containing a statement of a price that was likely to be understood by distributors as the price below which IBS goods were not to be sold.
IBS admits that in engaging in the conduct described above, it is likely to have contravened section 48 of the Act.
Upon being made aware of the ACCC’s concerns, IBS and Yuwah have offered an Undertaking to the ACCC pursuant to section 87B of the Act that they will not to engage in similar conduct for a period of three years.
International Beauty Supplies has offered an undertaking that it will:
write to its distributors advising them of the ACCC’s concerns and that they are free to determine the prices at which they advertise and sell IBS goods;
vary the Distributor Agreement to delete the ‘Prices’ clause; and
review its existing Trade Practices Compliance Program.
Snooze Management Pty Ltd and Snooze Sleep Well Pty Ltd (‘Snooze’) are the owner and franchisor of 70 Snooze bedding retail stores across Australia.
From 6 October 2008 to 2 November 2008, Snooze ran a national “50 months Interest Free” marketing campaign whereby many products were promoted in its retail stores using comparison pricing in the ‘Was $X Now $Y’ format.
An ACCC audit of Snooze retail stores revealed that a number of the products had not been offered for sale or sold at the ‘Was’ prices for a reasonable period immediately prior to the October campaign.
Snooze admits the ‘Was’ prices were actually a reference to their own internally-set recommended retail prices, rather than the price at which their products were offered for sale or sold for a reasonable period immediately prior to the October campaign.
Snooze therefore admits that their ‘Was/Now’ pricing during their October campaign is likely to have misled or deceived consumers in breach of sections 52 and 53(e) of the Trade Practices Act 1974.
Upon being made aware of the ACCC’s concerns, Snooze have offered an Undertaking to the ACCC pursuant to section 87B of the Act that it will:
not engage in similar conduct;
display in-store corrective notices;
publish an information notice in FB Magazine;
write an apology letter to customers known to have purchased a product promoted in-store by ‘Was/Now’ pricing during their October campaign and will offer them a $50 gift voucher;
establish and implement a trade practices compliance program; and
write a letter to franchisees offering trade practices compliance training.