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Sandringham
by John Mellor
| 16 Aug 2023 | | General News - Page 26 - 611 words - ID 1911211770 - Photo: Yes - Type: Car Review - Size: 529.00cm2 | |
American company used US dealer contracts that breached Australian competition rules
THE Australian Competition and Consumer Commission (ACCC) has taken action against a recreational motorbike importer and distributor, Hornet Industries, after it found the company's dealer agreements said they could not sell its products below certain prices.
The ACCC action was taken after the Victorian Automotive Chamber of Commerce (VACC) via its Motorcycle Industry Division raised the concerns of Victorian regional motorcycle dealers with the regulator.
The dealers had alerted the VACC to dealer agreements with Hornet Industries that sought to prevent them from selling products at or below specified minimum prices and directed them not to sell below those prices.
Hornet Industries is an importer and distributor of recreational bikes including pit motorbikes, dirt motorbikes, quad motorbikes and balance bicycles. It also supplies spare parts for recreational bikes.
Hornet Industries sells recreational bikes directly to consumers via its website and retail outlets, and to independent dealers throughout Australia via its dealer network.
The ACCC said that from at least March 2021 to December 2022, Hornet Industries offered to enter into agreements with dealers that contained requirements that prevented them from selling recreational bikes below the minimum advertised prices specified on price lists.
The ACCC said that Hornet Industries emailed its dealers directing them not to sell under the 'minimum advertised price', being a price less than the 'manufacturer's suggested retail price' specified on price lists.
It is illegal for suppliers to impose minimum prices for the resale of their goods or services. The agreements supplied by Hornet Industries were based on similar dealer agreements used in the United States.
As a result of the action, Hornet Industries has provided a courtenforceable undertaking to the ACCC, including committing to advise all its independent resellers that the agreements containing minimum price requirements have been withdrawn and that the independent resellers are free to set their own prices.
Hornet Industries Pty Ltd will also notify their dealers that any prices contained in Hornet Industries' communications are recommended prices only and there is no obligation to comply with the recommendation.
The ACCC said it identified Hornet Industries' actions as resale price maintenance that is prohibited under the Competition and Consumer Act 2010 (CCA).
Hornet Industries admitted that its conduct was likely to contravene section 48 of the CCA.
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Continued from previous page Hornet Industries has admitted that, from at least March 2021 to December 2022, it offered to enter into agreements with independent dealers that prevented them from selling recreational bikes, including pit motorbikes, dirt motorbikes, quad motorbikes, and balance bicycles at a price below the minimum advertised price specified by Hornet Industries, and directed the independent resellers not to sell under that price.
To address the ACCC's concerns, Hornet Industries provided the ACCC with a section 87B undertaking that includes: . A d m i s s i o ns a n d acknowledgements of the ACCC's concerns; . Commitments to ensure that the conduct is not repeated; . Corrective notices to dealers affected by the conduct; and . Establishing and implementing a competition and consumer compliance program that will operate for a minimum of three years.
The notice from Hornet Industries to dealers reads: "Dealer corrective notice Hornet Industries Proprietary Limited "We are contacting you as a dealer of recreational bikes supplied by Hornet Industries.This includes pit motorbikes, dirt, motorbikes, quad motorbikes and balanced bicycles.
"We want to let you know about things we've done that are prohibited under Australia's competition laws.
"We: 1. offered to enter into dealer agreements that required our recreational bikes to be sold at or above a minimum price that we had set."
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