Posted by Elizabeth Gore-Jones
on 10 May 2024
On 14 March 2024, the ACCC issued a final decision refusing authorization for Bakers Delight Holdings Ltd to introduce a price tiering structure for a selection of promotional items within its new point-of-sale system.
Promotional discounts play a crucial role in enticing customers, offering them savings based on specific purchasing behaviors. These apply to various Bakers Delight products such as Value Packs and Combos, and are evaluated against a customer’s shopping cart to determine eligibility.
In the new point-of sale system, Bakers Delight would select a number of price tiers for each of these promotional products and Bakers Delight bakeries would only be able to select one of the pre-configured price tiers for these products.
The latter may only deviate to any of these pre-configured price tiers for a promotion discount, creating a fixed range of promotion discounts.
The system lacked flexibility in handling price deviations for promotional discounts. Unlike the existing system, which allows individual bakeries to set promotional prices, the new system would restrict such autonomy.
The ACCC's decision stemmed from concerns regarding the potential public detriment outweighing any perceived benefits. By restricting franchisees' ability to make independent decisions about promotional pricing, the proposed system could have negative implications for their financial viability.
In denying authorization, the ACCC emphasized the importance of preserving fair competition and protecting consumer rights and interests.
Moving forward, Bakers Delight and other stakeholders in the retail industry must navigate these regulatory challenges carefully. While innovation is essential for growth, any proposed changes must align with consumer welfare and market dynamics to avoid regulatory scrutiny.
Whether you are a franchisee seeking guidance on contract negotiations or a franchisor navigating regulatory changes, we are here to provide tailored legal solutions to protect your interests and promote your success.
Contact us today to learn more about how we can assist you in achieving your business goals.
