The Australian Competition and Consumer Commission has issued legal proceedings against a supplier of paragliders, High Adventure Pty Limited, and its sole director Mr Lee Scott, alleging resale price maintenance in contravention of section 48* of the Trade Practices Act 1974.
High Adventure Pty Limited is a supplier of Sky Paragliders' products in Australia. Sky Paragliders is a Czech Republic based manufacturer and supplier of paragliders and paragliding accessories.
The ACCC alleges that in July 2003, High Adventure made it known to Walkerjet, a retailer, that it would not supply Sky Paragliders' paragliders and/or accessories to Walkerjet unless it agreed not to sell or advertise the paragliders and/or accessories below the price specified by High Adventure. The ACCC also alleges Mr Lee Scott was directly or indirectly knowingly concerned in, or party to, the alleged contraventions of the Act.
On 12 July 2003, Mr Scott sent an email to a director of Walkerjet entitled, "Dealer’s price list for 2003 season". Attached to this email was a price list which specified "Retail price in AUD" and terms for the supply of Sky Paragliders' paragliders and/or accessories. One of the terms stated that:
"Dealer can advertise that they sell the products but only with retail prices…"
The terms further stated:
"Failure of Compliance with above terms will result in immediate disqualifications (sic)"
The ACCC is seeking declarations, a pecuniary penalty and injunctions restraining High Adventure from:
- making it known to any person that it will not supply goods to that person unless they agree not to sell or advertise the goods at prices less than those specified
- offering to enter into an agreement with any person for the supply of goods requiring the person not to sell or advertise the goods at prices less than those specified and
- using in relation to goods it may supply to any person, a statement of prices that are likely to be understood as the prices below which the goods are not to be sold or advertised for sale.
The ACCC is also seeking an order that High Adventure Pty Limited offer to appoint Walkerjet as a dealer of Sky Paragliders' paragliders and accessories for a term of no less than three years. In addition, the ACCC is seeking declarations, injunctions and a pecuniary penalty against Mr Lee Scott.
A directions hearing for the matter is listed for Tuesday, 27 January 2004 at 10:15 am in the Federal Court, Melbourne.
*Section 48 of the Trade Practices Act 1974 prohibits 'resale price maintenance'. A company engages in resale price maintenance in part where it tries to stop a reseller from discounting a product or where it attempts to stop a reseller from advertising products below a specified price.