Following an investigation by the ACCC, wholesale sewing machine company Janome Australia Pty Ltd and its managing director have admitted to engaging in resale price maintenance (RPM), in contravention of section 48 of the Trade Practices Act 1974 (Cth) (TPA). The purpose of section 48 is to promote competition in the market by ensuring that suppliers do not impose price restraints on re-suppliers of goods or services.
Between February and April 2008 Janome sought to impose price restraints in the form of a ‘minimum advertised price policy’ on its retailers. This effectively meant that there could be no competition on prices between retailers, which resulted in a higher average price paid by consumers. The policy was suspended in May 2008 following concerns raised by the ACCC.
Both Janome and its managing director offered court enforceable undertakings to:
- not engage in similar conduct in the future
- implement and maintain a trade practices compliance program
- advise retailers of contravening conduct, and
- implement corrective advertising.
This is the second major RPM case taken by the ACCC in recent months. In March 2009 the Federal Court imposed a record breaking fine on Australian aluminium boat manufacturer Telewater for engaging in resale price maintenance. This was covered in our April update.4