Posted by Elizabeth Gore-Jones
on 3 November 2023
The ACCC has recently taken a strong stance against resale price maintenance by accepting a court-enforceable undertaking from wholesale lighting and electrical supplier, Brilliant Lighting (Aust) Pty Ltd, who admitted to engaging in such act by not allowing their retailers and distributors to display headline prices on their websites below certain levels.
Resale price maintenance is a practice where suppliers prevent resellers from advertising or selling products below a set minimum price.
As part of the undertaking, Brilliant Lighting has agreed to send corrective notices to affected retailers and distributors, establish a compliance program, and refrain from enforcing minimum resale prices.
This case serves as a crucial reminder for franchisors to be vigilant about compliance with competition laws and avoid engaging in resale price maintenance.
Resale price maintenance can include:
- non-supply of products unless a reseller agrees to advertise or sell below a specified minimum price;
- inducing a reseller not to advertise or sell below a specified minimum price;
- withholding of supply of products if a reseller refuses to comply with a specified minimum price;
- using a statement likely to be understood as the price below which the products are not to be sold.
Instead, what franchisors can do is lodge a notification of resale price maintenance conduct with the ACCC or apply for ACCC authorisation if they can show that its likely public benefit outweighs its likely detriment.
In summary, resale price maintenance is strictly prohibited, and franchisors need to be aware of what it is and the serious consequences it brings.
