Following Australian Competition and Consumer Commission action, penalties totalling $100,000 have been imposed by the Federal Court in Adelaide on IGC Dorel Pty Ltd and its managing director, Robert Berchik.
The company admitted engaging in resale price maintenance by not allowing retailers to discount its Bertini brand baby prams.
"The Trade Practices Act protects the right of retailers to make their own decisions concerning the price of products," ACCC chairman Graeme Samuel said today. "The ability to discount products to attract customers is important for retailers and provides a competitive environment for consumers to find the best deal.
"The ACCC will continue to pursue suppliers who try to prevent retailers discounting."
Between 2007 and 2009, IGC Dorel:
- made it known to some retailers that it would not supply Bertini products unless those retailers agreed that they would not sell Bertini products at prices less than those specified by IGC Dorel
- attempted to induce some retailers not to sell Bertini products at prices less than those specified by IGC Dorel
- entered into an agreement with a retailer, a term of which was that the retailer could not sell Bertini products at prices less than those specified by IGC Dorel, and
- used statements of prices that were likely to be understood by retailers to be prices below which Bertini products were not to be sold or offered for sale.
The court:
- declared that IGC Dorel contravened the resale price maintenance provisions of the Trade Practices Act 1974 and that Mr Berchik was knowingly concerned in one of the contraventions
- granted injunctions restraining IGC Dorel and Mr Berchik from engaging in similar conduct in the future
- ordered IGC Dorel to send a letter to its current retailers of Bertini products to notify them of the outcome of the proceedings and to inform them of the illegality of resale price maintenance
- ordered IGC Dorel to implement a trade practices law compliance and education program
- ordered IGC Dorel to pay a pecuniary penalty of $80,000
- ordered Mr Berchik to pay a pecuniary penalty of $20,000, and
- ordered IGC Dorel to contribute $25,000 to the ACCC's costs of the proceedings.
Mr Samuel also noted that IGC Dorel had co-operated with the ACCC in its investigation and settlement of the matter and that the imposed penalty took into account this cooperation.