ACCC denies Narta the right to fix Beko advertising prices

A proposal by Narta to fix advertising prices of Beko appliances has been quashed by the ACCC as it would present “a significant public detriment”. Narta had wanted to set minimum pricing on Beko products for its members, which include Bing Lee, Betta Electrical, Myer, Bi-Rite, Retravision and David Jones.

Since launching in late 2011, Beko has been sold exclusively through Narta stores. Appliance Retailer understands that several Narta members have been unhappy with rival members’ catalogue promotions for the brand.

“The ACCC has denied authorisation because Narta’s proposed conduct would be likely to result in significant public detriment by reducing competition between retailers and raising both the advertised and selling prices of electrical products,” said ACCC deputy chair Michael Schaper.

“Allowing Narta to set a minimum advertising price on a broad range of electrical goods may have provided increased choice for consumers on some products but the ACCC considers this benefit is likely to be outweighed by the reduction in competition between retailers from setting minimum advertised prices.”

The ACCC first hit out at Narta’s request to set minimum advertised pricing in January 2013. At the time, ACCC said it was “concerned” by this proposal. Narta’s application asked for authority to unilateraly set the price for some Beko products without agreement from its members.

To do this, Narta would have needed to change its constitution. The relevant amendment would have read:

“When advertising the price of goods purchased under a Narta initiated collective purchase for Beko branded electrical products, new release or premium electrical goods, and exclusive models of electrical goods, you [a retailer] agree to use only the minimum advertising price as may be specified by Narta for those goods from time to time. The selling price of those goods remains completely at the individual member’s discretion.”

Having standard minimum advertising prices does not necessarily mean retailers cannot undercut each other when negotiating with customers. It does, however, make the impotent the ability for retailers to attract consumers with significant discounts on rival retailers in catalogues.

As Narta has the exclusive distribution rights for members, the group had hoped to install minimum pricing among the retailers it represents to offset internal discord. Beko has become a de facto house brand for Narta and, although it has been troubled by product recall issues, it remains a valuable part of the retailers’ product mix.

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