Ad ban proposal falls foul of watchdog

THE competition watchdog has signalled its opposition to a proposal that would prevent retailers such as David Jones, JB Hi-Fi and Bing Lee from advertising discounts on a range of electrical goods, including televisions, cameras, and espresso machines.

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.