Recreational bike importer and distributor, Hornet Industries Pty Ltd, has admitted that it likely engaged in resale price maintenance. It did so by offering its independent resellers agreements that would prevent them from selling products at or below specified minimum prices and directing them not to sell below those prices.
It is illegal for suppliers to prevent, or attempt to prevent, resellers from advertising or selling goods or services below a specified price.
The business admitted that, from at least March 2021 to December 2022, it offered to enter into agreements with independent resellers that prevented them from selling recreational bikes at a price at or below the minimum advertised price specified by Hornet Industries and directed the independent resellers not to sell under that price. The agreements were based on similar dealer agreements used in the United States.
Hornet Industries has provided a court-enforceable undertaking to the ACCC, committing to advise all its independent resellers that the agreements containing minimum price requirements have been withdrawn and that the independent resellers are free to set their own prices. It will also notify them that any prices contained in Hornet Industries' communications are recommended prices only and there is no obligation to comply with the recommendation.
"Resale price maintenance prevents retailers competing on price, which increases what consumers pay for products and services," ACCC Deputy Chair Mick Keogh said.
"Businesses that operate internationally must ensure their agreements comply with Australia's competition and consumer law before offering them to other businesses in Australia, including smaller businesses such as dealers or resellers."
A copy of the undertaking is available at Hornet Industries Pty Ltd.
Note
Resale price maintenance is illegal and occurs where a supplier prevents, or attempts to prevent, independent retailers from advertising or selling goods and services below a specified price.
Resale price maintenance occurs when suppliers:
- make it known they will not supply goods or services unless a reseller agrees to advertise or sell at a price below a specified minimum price
- induce, or attempt to induce, resellers not to advertise or sell below a specified minimum price
- enter into agreements, or offer to enter into agreements, for the supply of goods or services on terms including that the reseller must not advertise or sell below a specified minimum price
- withhold supply of goods or services because a reseller, or a purchaser from the reseller, has not agreed to not advertise or sell below a specified minimum price, or has advertised or sold (or is likely to sell) at a price below a specified minimum price
- use, in relation to goods or services supplied or that may be supplied, a statement as to price which is likely to be understood as the price below which the goods or services are not to be sold.
Businesses may lodge a notification of resale price maintenance conduct or apply for authorisation of proposed resale price maintenance conduct, which will be permitted if the likely public benefit from the resale price maintenance conduct outweighs the likely detriment from the conduct. More information about resale price maintenance can be found at Imposing minimum resale prices.
Background
Hornet Industries sells recreational bikes directly to consumers via its website and retail outlets, and to resellers throughout Australia via its dealer network.
Recreational bikes include pit motorbikes, dirt motorbikes, quad motorbikes, and balance bicycles.
