Sun Imports - s.87B undertaking

The price of Sun Imports tanning products increased by a full 10% with the implementation of the GST despite the removal of a 22%wholesale sales tax which, in the absence of other factors, should have resulted in a reduction in the price of these products as a result of the changes arising under the New Tax System.

The ACCC wrote to Sun Imports expressing concern that the failure of Sun Imports to pass on savings resulting from the New Tax System changes may amount to conduct in breach of the price exploitation provision of The Trade Practices Act 1974 ("the Act"). The ACCC also considered the conduct of Sun Imports may raise issues under sections 52 and 53(e) of the Act. Following the concern raised by the ACCC Sun Imports has introduced some price reductions for its tanning products to compensate its customers who have been overcharged and their consumers when they also have been overcharged.

In response to the concerns expressed by the ACCC Sun Imports has provided a section 87B undertaking to the ACCC which provides that:

• Sun Imports' previous GST exclusive prices will now become its GST inclusive prices, with the prices being set out in the price list at Attachment A of the undertaking;
• Sun Imports customers will be issued with fresh invoices in respect of invoices issued between 1 and 18 July 2000 (copies of the fresh invoices will be provided to the ACCC);
• Sun Imports will seek confirmation in writing from all retail outlets and distributors how many, if any, of its tanning products were sold at the incorrect prices, and how many affected consumers have been provided with a refund (copies of letters from its retailers and distributors confirming the number of Sun Imports products sold at the incorrect price from 1 July 2000 and the number of consumers that were provided with refunds will be provided to the ACCC);
• Sun Imports will prepare and arrange for a corrective notice to be placed in a prominent location in the Sun Lounge store at 298 Bay Street, Port Melbourne and the Zanzi Beach store at 3/1 Scarborough Beach Road, North Perth for a period of one month from the date of the undertaking. The corrective notice will conform to the notice at Attachment B of the undertaking; and
• Sun Imports will ensure that any future increases in price will be made on a close monitoring of exchange rates, supplier prices and operating costs, and in accordance with ACCC guidelines on price exploitation.