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ACCC jumps on cycling company over anti-discount agreements

Business

The competition watchdog, the Australian Competition and Consumer Commission, will take legal action in the Federal Court against Brisbane cycling equipment wholesaler FE Sports over anti-competitive behaviour.

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Despite three warnings made to the company, the ACCC said FE Sports continued its resale price maintenance which prevented retailers of its products from advertising any discounts.

The ACCC alleges that between February 2017 and June 2019 FE Sports provided 328 dealer agreements that contained terms that prevented the dealer from advertising or promoting products of certain brands for less than the price set by FE Sports.

It alleges another 242 agreements were struck with dealers containing a recommended price term.

“Resale price maintenance is anti-competitive conduct which limits the ability of retailers to compete on price and ultimately can mean consumers pay more for products because retailers are stopped from discounting,” ACCC commissioner Sarah Court said.

“FE Sports was well and truly put on notice by the ACCC that resale price maintenance is illegal and it had ample opportunity to ensure it complied with the law.”

The ACCC is pursuing declarations, injunctions, pecuniary penalties, an order for corrective notices, a compliance program and costs.

FE Sports is a Brisbane-based wholesale distributor of cycling and sporting products to hundreds of dealers in Australia.

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