The Australian Competition and Consumer Commission (ACCC) is set to reject a resale price maintenance (RPM) notification which wanted to prevent retailers from selling welding and plasma cutting machines at a discounted price.
Tamworth NSW-based Weldclass lodged the RPM notification with the ACCC on 4 October 2019, after releasing a new range of machines to the Australian market, branded WeldForce and CutForce, in March 2019.
The ACCC stated it proposes to revoke Weldclass’ RPM notification because any public benefit would not outweigh the detriments that are likely to result from reduced price competition on the welding machines.
ACCC Commissioner Stephen Ridgeway said after considering Weldclass’ position, the commission does not consider that the proposed conduct would result in a net public benefit.
“Allowing Weldclass to set minimum retail prices would mean that retailers could no longer offer consumers discounts on the Weldclass products and consumers would therefore pay higher prices,” Ridgeway said.
- Federal Government called upon to invest in skilled workers
- Transforming construction with robotics
- Turning welding data into dollars
Ridgeway said it is also likely to reduce competitive pressure for other welding machines with the result consumers would pay higher prices for the machines too.
“We are also concerned that retailers will stop selling other brands of machines, further reducing competition between brands,” Ridgeway said.
Weldclass is concerned that some consumers may seek advice from full-service retailers about its products, but then buy from discount retailers.
The company claims that setting minimum prices would enable full-service retailers to receive a higher margin for providing service and advice to consumers.
Ridgeway said consumers should not have to pay a higher price for a service if they don’t need it.
“We believe retailers should generally be free to set their own prices,” he said.
Weldclass agreed to not commence its RPM conduct until after the ACCC had assessed its notification.