International Beauty Supplies has admitted a contract it entered into with distributors for the resale of its beauty products is likely to have breached the resale price maintenance provisions of the Trade Practices Act 1974.
"It is common in many industries for suppliers to recommend resale prices, but suppliers must not influence resellers to sell at a minimum price or prevent them from discounting," ACCC chairman Graeme Samuel said today.
International Beauty Supplies is the wholesaler of beauty products including Anesi skin care, California Mango body care, Depiléve depilatory wax, OPI nail polish and St Tropez tanning products.
In February 2008 International Beauty Supplies entered into written agreements with its 28 distributors across Australia. The agreement contained a clause which specified that distributors must sell the products at the prices published by International Beauty Supplies.
International Beauty Supplies provided distributors with price lists and catalogues containing prices that were likely to be understood by distributors as the price below which International Beauty Supplies goods were not to be sold.
International Beauty Supplies has admitted that it engaged in conduct which is likely to have contravened the Trade Practices Act 1974, and has offered a court-enforceable undertaking to the ACCC.
International Beauty Supplies will write to its distributors informing them that they are free to advertise and sell goods supplied by International Beauty Supplies at any price they wish.
"The ability to discount is essential to retailers who wish to engage in price competition," Mr Samuel said.