Economy

Sports gear maker hit with $120,000 penalty for price fixing

SmartCompany /

Sporting apparel company Skins Compression Garments has been hit with a $120,000 penalty after the Federal Court found the company guilty of resale price maintenance.

Sporting apparel company Skins Compression Garments has been hit with a $120,000 penalty after the Federal Court found the company guilty of resale price maintenance.

The Australian Competition and Consumer Commission launched action against Skins after a representative of its South Australian agent induced a retailer in Adelaide not to advertise Skins products at a discount on one occasion, and attempted to induce the same retailer not to advertise Skins products at a discount on two other occasions.

The court ordered that Skins pay a penalty of $120,000 for resale price maintenance conduct. The representative involved, Christopher Warhurst, was ordered to pay $14,000 for his involvement.

Skins must also pay the ACCC’s costs and write to its current retailers, agents and distributors to tell them about the case.

To add insult to injury for Skins, the company has also been found guilty of misleading and deceptive conduct in relation to its advertising campaign.

In advertisements on television, radio and in print, Skins proudly trumpeted the fact that it did not pay sports stars to use its products, or give products to sports stars free.

Problem was the company has 29 separate endorsement deals with sporting stars and clubs, including cricketer Brett Lee and the St Kilda and Melbourne AFL clubs.

The court ordered Skins to publish a corrective notice on its website, publish a corrective notice in B&T Weekly and broadcast a corrective advertisement on SBS.

ACCC chairman Graeme Samuel said he was pleased with the outcome of the case.

“It should serve as a warning to business that the ACCC will take action in the public interest against those who engage in misleading advertising or resale price maintenance.”

In a separate case, the Federal Court has declared that claims that an Australian developed nappy was “100% biodegradable” were false and misleading.

Perth-based SeNevens International claimed its Safeties Nature Nappy product, including nappy disposal bags, were biodegradable. But Justice Marshall declared that the biodegradability claims were false and misleading because the product contained plastic components that are not capable of being broken down by the biological activity of living organisms.

Justice Marshall imposed injunctions on SeNevens, ordered the company to publish a corrective advertisement on its website, and ordered that SeNevens pay the ACCC’s costs.

Advertisement
SmartCompany

SmartCompany is the leading online publication in Australia for free news, information and resources catering to Australia’s entrepreneurs, small and medium business owners and business managers.

We Recommend

FROM AROUND THE WEB