Ad ban proposal falls foul of watchdog
Narta International, which acts as the buyer for 30 electrical goods retailers in Australasia, is proposing arrangements that would enable it to set a minimum advertising price for its members on a wide range of electrical goods it sources, according to the Australian Competition and Consumer Commission.
Narta's submission said: "Narta would not impose limitations or restrictions on a member's actual selling prices."
The ACCC issued a draft decision on Thursday proposing to deny authorisation and seeking comment on its draft determination.
"The ACCC has concerns that the ability for Narta to set a minimum advertising price on a broad range of electrical goods will reduce competition between retailers and result in higher prices for consumers," commission chairman Rod Sims said.
"This is particularly a concern for competition with online retailers, which generally do not negotiate their selling prices down from the advertised price like bricks and mortar retailers might do."
The commission said it may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.
In its submissions to the ACCC, Narta executives said a minimum advertising price could be proposed to a supplier where "the ability to offer a consistent marketing message is necessary for Narta to obtain access to desirable products at launch". It could also be used to get exclusive access to new products.
"Currently, Narta is frequently excluded from such access and therefore will only be offered supply of some products after the expiry of any exclusivity that has been agreed between a supplier and a Narta competitor," it said.
Suppliers Narta deals with include Nikon, Smeg, Sony, Canon and Westinghouse.
Frequently Asked Questions about this Article…
The proposal would have prevented retailers from advertising discounts on a range of electrical goods by allowing Narta International to set a minimum advertising price for its members on many electrical products it sources.
Narta International acts as the buyer for about 30 electrical goods retailers in Australasia and proposed arrangements that would enable it to set a minimum advertising price for its members on a wide range of electrical goods.
The article specifically names retailers such as David Jones, JB Hi‑Fi and Bing Lee as examples of the types of bricks‑and‑mortar stores that could be affected, alongside other Narta member retailers.
The Australian Competition and Consumer Commission (ACCC) said it was concerned that allowing Narta to set minimum advertising prices across a broad range of electrical goods would reduce competition between retailers and could lead to higher prices for consumers, particularly harming competition with online retailers.
No. Narta's submission stated that it "would not impose limitations or restrictions on a member's actual selling prices," though it sought to control minimum advertised prices.
Narta told the ACCC a minimum advertising price could be proposed to a supplier when a consistent marketing message was necessary to obtain access to desirable products at launch, and it could also be used to secure exclusive access to new products.
The ACCC issued a draft decision proposing to deny authorisation for the arrangements and is seeking comment on its draft determination. It noted it may grant authorisation only if the public benefit outweighs any public detriment.
The article lists suppliers Narta deals with, including Nikon, Smeg, Sony, Canon and Westinghouse.
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