ACCC nabs homebrew supplier Edwards Essences in resale price maintenance crackdown

The ACCC has continued its crackdown on resale price maintenance, with a director of Queensland-based homebrew supplier Edwards Essences set to attend trade practices compliance training after the company was found to have asked customers not to sell their product under a certain price.

But Edwards Essences co-director Nicky Edwards told SmartCompany this morning the company was shocked and disappointed by the experience.

“We had one customer who was selling our product very cheaply, so we received complaints from our other customers. This promoted us to ask them to bring their prices down,” Edwards said.

“I know that you can’t tell people what price to sell [our products] at, but I didn’t think that asking them to be in a certain range and come in line with our other customers was such an offence. It would get the other customers off our backs,” she said.

The ACCC said in a statement that Edwards was cooperative and had acknowledged that it had told a distributor on two separate occasions that they should not sell goods supplied by the company at a price less than that recommended by Edwards.

The company has agreed it will not engage in resale price maintenance, will notify distributors of their freedom to set their own prices, and will not place pressure on distributors who offer discounted prices.

ACCC chairman Rod Sims said that “businesses must be free to sell their products at prices below suppliers’ recommended retail prices if they wish”.

“Consumers like to shop around in order to get the best deal. This encourages businesses to compete on price and enables consumers to buy at lower prices.”

“The ACCC takes seriously any attempts by suppliers to prevent discounting of their products, which affects the fundamental right of traders to compete for business”.

The Edwards Essences issue follows similar investigations by the ACCC earlier this month, when cosmetics supplier Eternal Beauty was found to have pressured two retailers not to sell their products at certain prices less than those stipulated by the company.

Only last week Sims warned the watchdog will be cracking down on established companies trying to make it harder for new, online stores to do business. 

Everton Online general manager Hal Pritchard said that resale price maintenance is an ongoing and active debate in the market.

“There is heightened awareness in the marketplace at the moment making conversations very circular,” he said.

Pritchard said he encountered suppliers who are very aware of the laws, so try to encourage certain resale prices without explicitly enforcing them.

“The biggest issue is I have suppliers who won’t sell their products to me because they won’t accept anything under a certain resale price,” he said.