Coffee machine distributor penalised $280,000

I’ve been researching a new coffee machine after my crappy first generation Chinese import lost puff. If a machine is any good, there is usually a massive cost differential between what I could buy it for overseas and in Australia.
Then poking around the Australian Competition and Consumer Commission website for a story for The Australian, I found the press release below. I think we’ll find quite a few other companies that import kitchen paraphernalia taking the piss out of us (not to mention department store David Jones that sells Paul Smith shirts for $399 when I could buy them online from the UK for $280, including postage).

From ACCC:
“A penalty of $280,000 has been imposed on Cambur Industries Pty Ltd, the sole Australian distributor of Bamix and Magimix branded kitchen products, including the dual branded Nespresso/Magimix coffee making machines, for engaging in resale price maintenance.

A Cambur sales and marketing manager, Mr John (Sean) Caulfield, admitted that he was directly and knowingly concerned in and party to each and every contravention by Cambur and was fined $32,000.

The penalties were imposed today by Justice Besanko of the Federal Court, Adelaide, following action taken by the Australian Competition and Consumer Commission in September 2005. Cambur had earlier admitted to the court that in its dealings with two Adelaide-based authorised stockists, it had breached section 48 of the Trade Practices Act, by:

inducing or attempting to induce the stockists not to sell and advertise Cambur products at prices less than prices specified by Cambur
making it known to the stockists that Cambur would not continue to supply Cambur products unless the stockists agreed not to sell and advertise Cambur products at prices less than prices specified by Cambur, and
using statements of prices that were likely to be understood by the stockists as the prices below which Cambur products were not to be sold and advertised for sale.
Cambur also admitted that in its dealings with one of the stockists it engaged in resale price maintenance by withholding supply of Cambur products to the stockist for the substantial reason that the stockist had sold and had advertised Cambur products at prices less than prices specified by Cambur.

In submissions to the court, Cambur advised it had since written to its authorised stockists to inform them that it had engaged in unlawful conduct and that they were at liberty to make their own decisions on whether to discount products.

Given that Cambur had already implemented a trade practices compliance program, Justice Besanko accepted an undertaking in relation to that program. He also ordered Cambur to pay the ACCC’s costs, as agreed or taxed.

“Suppliers cannot seek to build brand value by imposing a minimum retail price for goods they have supplied – that is a decision for the retailer”, ACCC Chairman, Mr Graeme Samuel, said today.

“Imposing such minimum retail prices prevents consumers from obtaining lower prices that may otherwise be available through competition”.