Competition Law Cases
ACCC v IGC Dorel Pty Ltd
 FCA 1303 (10 December 2010)
IGC Dorel (first respondent) and the Robert Berchik (second respondent), admitted the alleged RPM conduct and agreed with the ACCC about appropriate orders. The Court accepted that those orders were appropriate. The conduct involved various forms of resale price maintenance over a period of time, including representations to certain retailers using words to the following effect:
'IGC Dorel wants retailers to make the greatest margin possible and does not expect Bertini Products to be discounted. If Baby Bella is found to be discounting it will be liable to lose the range.'
'IGC Dorel wants to see the recommended retail prices of Bertini Products maintained. IGC Dorel has previously taken stock away from a store as an illustration that IGC is serious about maintaining the RRP.'
'We set the prices of Bertini, you are not to discount. If you’re found to be discounting we’ll send in trucks and we'll no longer be supplying you. I don’t want the product bastardized. I designed this product and it’s well worth the RRP.'
A price list accompanied by the following email was also distributed
'As I am sure you will notice, there have been substantial changes to our pricing - which allows you the more generous margin Robert was wanting to give you. That said, I sincerely hope that is the case - instead of pricing discount. This is even more important when it comes to the Bertini X & Z series
It has been a long standing arrangement with our retailers that Bertini is not to be discounted at any time. The brand reputation and the high quality product are a perfect fit for the RRP and we intend to continue uphold the brand integrity and not lending it to discount wars.
As part of the Bertini ranging agreement, any retailer that is found to vary (even slightly) under the RRP, will have the stock removed from store immediately and further ranging halted. That said there really is no need to discount to sell - as they (sic) range sells itself!'
The following orders were made:
- Declaratory orders that the agreed conduct occurred and contravened s 48
- Agreed pecuniary penalties pursuant to s 76 ($80,000 for the first respondent and $20,000 for the second respondent)
- That the first respondent 'be and is hereby restrained for a period of three years from the date of this order, in relation to the supply or potential supply of Bertini Products from:
- making it known to a person that the First Respondent will not supply Bertini Products to the person unless that person agrees not to sell or advertise Bertini Products at a price less than a price specified by the First Respondent;
- inducing or attempting to induce a person not to sell or advertise Bertini Products supplied or that may be supplied to that person by the First Respondent at a price less than a price specified by the First Respondent;
- entering into or offering to enter into an agreement for the supply of Bertini Products to a person, being an agreement one of the terms of which is that the person will not sell or advertise Bertini Products at a price less than a price specified by the First Respondent; and
- using, in relation to Bertini Products supplied, or that may be supplied, by the First Respondent to a person, a statement of price or prices which is likely to be understood by that person as the price or prices below which Bertini Products are not to be sold or advertised for sale.'
- That the second respondent be similarly restrained
- That the first respondent send letters to each of its current retailers in specified terms and notify the ACCC of compliance with that order
- That the first respondent establish, maintain and administer a Trade Practices Complaince program
- That the first respondent pay costs in the amount of $25,000 to the ACCC
Other than the orders themselves, there was no discussion of the resale price maintenance conduct. There was some brief discussion of the principles relating to the acceptance by the court of agreed penalties:
'the Court retains the responsibility for imposing penalties and the making of orders ... The Court is therefore not bound to make orders which the parties have agreed upon unless the Court is satisfied that those orders are appropriate.' (para 10)
'The Court however encourages the parties to arrive at negotiated settlements provided that the parties recognise that the ultimate responsibility for the terms and making of the orders lies with the Court: NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission  FCA 1134; (1996) 71 FCR 285.' (para 11)
'In determining whether the agreed penalty is appropriate, the Court will accept a proposed figure if it is within the permissible range ... In determining whether the proposed penalty is appropriate, regard is had to the views of the regulator.' (para 12)
'I have read the statement of agreed facts and the joint submissions made by the parties to determine whether the penalties agreed upon are within the appropriate range.' (para 13)