KitchenAid distributor undertakes not to induce retailers on price

Peter McInnes Pty Ltd, an importer and wholesaler of kitchenware products including KitchenAid stand mixers, has acknowledged concerns from the Australian Competition and Consumer Commission that it engaged in resale price maintenance and provided court enforceable undertakings.

KitchenAid mixing cake batter

Peter McInnes is the exclusive distributor of KitchenAid stand mixers in Australia and supplies the mixers to a number of retailers throughout Australia, including specialty stores and major department stores.

Resale price maintenance is an attempt by a supplier to control downstream prices of its products. It may be overt, such as when a supplier prohibits an independent retailer from advertising or selling the supplier’s products below a specified price. It may also occur through more subtle means, such as conduct by a supplier that induces, or attempts to induce, a retailer not to sell the supplier’s products for less than a specified price.

Resale price maintenance is prohibited under the Competition and Consumer Act 2010.

The ACCC considered that Peter McInnes engaged in resale price maintenance on four occasions between November 2011 and June 2013 by inducing or attempting to induce retailers who carried KitchenAid stand mixers to sell the mixers at the recommended retail price (RRP) through:

  • following a reduction in the mixers’ RRP, providing a rebate to only those retailers who had priced the mixers at the previous RRP in order to compensate them for their loss in margin;
  • expressing criticism of two retailers’ promotions where those promotions advertised only the discounted price of the mixers;
  • advising a retailer that the value of Peter McInnes’ contribution to retailers’ ‘gift with purchase’ promotions would be lowered due to retailers not pricing at the RRP when conducting such promotions.

“The competitive process relies upon retailers being free to discount their goods and compete with each other on price,” ACCC Commissioner Sarah Court said.

“If a supplier tries to force or induce a retailer to stick to a particular price, it concerns the ACCC as consumers benefit from being able to shop around for the best deal.”

Peter McInnes provided the ACCC with a court enforceable undertaking that it will:

  • refrain from engaging in resale price maintenance for a period of two years;
  • write to all of its KitchenAid stand mixer customers informing them that they are free to set their own minimum prices for products supplied to them by Peter McInnes;
  • issue directions to its employees that they should refrain from expressing to those customers any hostility or criticism about the customers discounting below the recommended retail price; and
  • implement and maintain a compliance program.
Photo Credit: Jack Amick (cc)