The competition watchdog says it will investigate fashion importers who are asking retail sites to inflate prices for Australian shoppers, warning suppliers could face multimillion dollar fines.
The news comes after it was revealed fashion importers such as International Fashion Group have reached agreements with brands to stop cheaper online sales from international sites.
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In a bid to stamp this out, the Australian Competition and Consumer Commission says it will look at whether this constitutes anti-competitive behaviour.
According to an ACCC spokesperson, the ACCC is “committed to having a look at it, and online is a priority”.
If found to have breached the law, suppliers could face fines that run into the millions of dollars, ACCC chairman Rod Sims told the ABC.
“If people are found guilty of a breach of the competition provisions of the act, it very much depends on the size of the company and the level of detriment, but penalties can be in the millions of dollars,” Sims said.
Russell Zimmerman, executive director of the Australian Retailers Association, told SmartCompany it was not uncommon for brands to protect their value and price point.
“Recent reports [of] local importers reaching agreements with international brands is really an issue for the importer and the brand,” Zimmerman said.
“Retailers are competing in a global environment with their overseas counterparts and the Australian market is exposed to both Australian and overseas shopping environments.”
“Research shows Australians who shop online prefer to buy from Australian websites, which is a real opportunity for Australian retailers.”
“In order to do this, Australian retailers need relief from operating costs they face as a result of rents, wages and the low-value import threshold.”
According to Sims, Australian retailers need to embrace competition.
“If you’re in the retail business – or indeed in any other business that’s significantly affected by online competition – then I would urge those companies to embrace that competition, because clearly consumers increasingly are going to want to buy online,” Sims said.
“And if you’re in the business of selling to those consumers, you need to embrace the technology and find ways of selling that way as well.”