Reading time: 3 minutes

This article will briefly overview the practice of Resale Price Maintenance before providing an update on the ACCC’s activities in prosecuting entities engaging in Resale Price Maintenance.

Resale Price Maintenance

Section 48 of the Competition and Consumer Act 2010 (Cth) (CCA) prohibits Resale Price Maintenance (RPM). No, not the Les Mills workout! RPM occurs where a supplier or manufacturer prohibits a reseller discounting the supplier’s products, preventing the supplier from competing on price. Competition and competitive markets are a central tenet of Australian Competition Law. RPM is then prohibited by the Competition and Consumer Act without exception (or is it? More on this at the end). Although a supplier can recommend that resellers charge a certain price for goods, it can’t prevent a reseller advertising or charging below this price. A supplier is also prohibited from pressuring a reseller to maintain their prices.

Resale Price Maintenance in Court (2015 Edition) 

We set out three cases that attracted the ACCC’s attention and unpack what prohibited conduct companies engaged in and what consequences they potentially face.

OmniBlend Australia

OmniBlend has two black marks against its name in the eyes of the ACCC. The ACCC alleges OmniBlend attempted to engage in price fixing with a competitor and resale price maintenance. OmniBlend engaged in RPM by refusing to supply the competitor unless it ceased discounting the price of blenders. The case is still ongoing.

Italiatech and TMO Sports

Italiatech and TMO Sports are importers and wholesalers of bicycle parts plus accessories, selling to shops all round Australia. The companies were exclusive distributors of a particular brand of bike helmet and a bike. The companies engaged in RPM by attempting to stop three retailers of the helmets and bikes discounting the products. The companies committed to not engage in RPM for five years, write to retail customers informing them of the undertaking and implemented a staff training program. 

The Case of Festool

As discussed, the CCA prohibits Resale Price Maintenance. Significantly, the ACCC permitted the first instance of RPM by ‘authorising’ the practice in late 2014. Tooltechnic Systems is a supplier of Festool power tools Australia wide. Because Festool tools require significant pre and post-sale services, the ACCC allowed Tooltechnic to prohibit retailers who offered post sales support from offering a lower price. Retailers who did not offer sales service could lower their prices because they did not benefit from being able to charge for sales service, therefore needed to compete on price.

Key Takeaways

In summary, Resale Price Maintenance is the practice of preventing a retailer from competing on price by discounting. Section 48 prohibits the practice and in 2015, the ACCC took a blender supplier and bike supplier to court. In 2014, the ACCC gave the first authorisation to an entity to engage in RPM.

Questions? Please get in touch on 1300 544 755. LegalVision’s experienced competition and consumer lawyers would be delighted to assist. 


Day in Court: What Happens When Your Business Goes to Court

Thursday 2 June | 11:00 - 11:45am

If your business is going to court, then you need to understand the process. Our free webinar will explain.
Register Now

How to Manage a Construction Dispute

Thursday 9 June | 11:00 - 11:45am

Protect your construction firm from disputes. To understand how, join our free webinar.
Register Now

Startup Financing: Venture Debt 101

Thursday 23 June | 11:00 - 11:45am

Learn how venture debt can help take your startup to the next level. Register for our free webinar today.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Innovation Award 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Award 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Financial Times Award 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year Award 2021 Law Firm of the Year - Australasian Law Awards
  • 2022 Law Firm of the Year Winner 2022 Law Firm of the Year - Australasian Law Awards