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MSA 4×4 and Offroad Animal admit to resale price maintenance

Following a tipoff from someone in the industry, the ACCC investigated Offroad Animal and MSA 4×4. It found both had engaged in separate instances of resale price maintenance. Both companies have admitted fault and committed to court-enforceable undertakings to rectify the error and ensure it does not happen again.

So what is resale price maintenance? It’s when suppliers prevent or induce resellers not to sell below a minimum price, for example by refusing to supply goods unless they are sold at a certain price, or by directing suppliers to sell at a minimum price, or withholding incentives if prices are set too low.

I asked the ACCC why that’s a problem and they said: “resale price maintenance prevents consumers from finding a better price for a product, which can mean consumers pay a higher price that they would if businesses were competing on price.”

The problem is best explained with examples from the Undertakings (source):

And for ORA:

You can see why that’s a problem for consumers.

I contacted both companies for comment. MSA didn’t get back to me (I will update this post if they do), but Offroad Animal’s David Fitzpatrick said:

“Not much of a story really.

We always told our resellers they could sell products for whatever they wanted but didn’t want them to advertise it for less.  Well we didn’t know that was against the Consumer act. So we’ve admitted to doing it as we’re now informed and no longer tell resellers that.  

No court case, no fines, just an email we have to put out and a notice on our website. “

It’s actually a bit more than just one-off email and a website notice. Both MSA and ORA have to put in place a compliance program in effect for at least three years, and here’s another excerpt:

Given at least ORA seemed to be ignorant of the law, I wondered what other companies might be unaware of their legal obligations and asked the ACCC for advice.

They said “Resale price maintenance is a longstanding legal prohibition and part of broader business compliance obligations. Those setting up businesses can seek professional advice about their obligations when buying and selling.”

And the ACCC has information about businesses specific to minimum retail prices which you can find here.

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