The competition watchdog has blocked a consortium of consumer electronics retailers from being able to set a minimum advertising price on a number of goods.
Narta International, a buying group representing several companies including David Jones, Myer and JB Hi-Fi, originally applied for the pricing proposal last year. This week the Australian Competition and Consumer Commission shut the proposal down.
ACCC deputy chair Michael Schaper told SmartCompany this morning the decision to block the proposal was due to the belief it would harm consumers.
“The argument on behalf of Narta was that, compared to some of the other buying groups, it felt disadvantaged.”
“This argument was specific to goods that it felt were of a premium quality, which it wanted to sell at a minimum price.”
The application would have allowed Narta to set a minimum advertising price on several exclusive products, or BEKO-branded products, which are collectively acquired by Narta members. These products include televisions, cameras, white goods and kitchen appliances.
Schaper says the argument was that Narta could compete with its main industry rivals, but it wasn’t convinced by the evidence put forward.
“This wasn’t an application to suggest it wanted to fix pricing on everything, only this specific range,” he says.
“Our problem was that, generally, fixed prices just aren’t good for consumers.”
Narta argued it could be implied the price is open for negotiation, but Schaper argued this possibility wouldn’t be reflected in the advertised price, and so most customers wouldn’t think of requesting a lower asking cost.
Narta, which represents over 30 companies and calls itself the largest independent electrical buying group in Australasia, was contacted by SmartCompany this morning, but declined to comment.
While Schaper couldn’t comment on whether industry pressures prompted the proposal, he says the impact of the proposal to fix prices would have led to less competition.
This decision follows an announcement in January, when the ACCC signalled its opposition to the proposal.