The Australian Competition and Consumer Commission issued a press release dated 24 March 2021 relating to FE Sports. We rarely run press releases verbatim, but due to its legal nature, the article that follows is a direct copy of that press release without further comment.
The Federal Court has ordered wholesale distributor B & K Holdings (QLD) Pty Ltd, trading as FE Sports, to pay a $350,000 penalty after it declared by consent that FE Sports engaged in resale price maintenance in relation to cycling and sporting products.
The Court declared that between February 2017 and June 2019 FE Sports provided 328 agreements to existing or prospective dealers containing terms prohibiting the dealer from advertising or promoting certain brands of products online for less than the recommended retail price (RRP). FE Sports entered into 242 of those agreements with dealers.
The agreements were for supply of bicycle accessories and sporting products by the brands Wahoo, Pirelli, 100%, 3T and Stages. In total, 246 dealers were affected.
“Resale price maintenance is harmful to competition and limits the freedom of retailers to compete on price to maximise sales,” ACCC Commissioner Sarah Court said.
“It also denies consumers the opportunity to buy products at lower prices as the retailers are unable to offer discounts.”
“Despite prior warnings from the ACCC about resale price maintenance conduct, FE Sports engaged in this conduct repeatedly, affecting hundreds of dealers over a period of more than two years,” Ms Court said.
The Court ordered FE Sports to refrain from including terms prohibiting discounting in its contracts with dealers, and to write to affected dealers indicating that they are free to set their own prices. FE Sports was also ordered to implement a compliance program.
“This is an important reminder to manufacturers, wholesalers and distributors, including those based overseas, that it is illegal to require independent retailers to sell goods or services at minimum or set prices,” Ms Court said.
FE Sports admitted liability and made joint submissions to the Federal Court with the ACCC, including on penalty.