By James Wells
Harvey Norman is using its run in with the ACCC yesterday as a learning experience, with chief operating officer John Slack-Smith telling Current.com.au that the recently mandated Australian Consumer Law is a “new environment” for suppliers and retailers.
Six West Australian Harvey Norman franchisees have each been fined $6,600 in infringement notices for not stocking a Kodak camera featured in a national catalogue advertisement. As a result of paying this infringement notice, the Harvey Norman franchisees have not admitted any guilt in this matter.
Current.com.au understands that part of the Harvey Norman franchise agreement, franchisees are required to stock all products featured in national catalogues. Furthermore, we understand that Harvey Norman catalogues are produced for a profit, with individual suppliers paying to be featured.
Slack-Smith said that although the franchisees have breached their agreement with the publicly listed Harvey Norman company by not stocking the camera, no further action would be taken.
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“We’ve had six franchisees in Western Australia that have received a small fine, for not stocking a specific Kodak camera that was advertised in a national catalogue in late 2010,” Slack-Smith said. We’ve worked with the ACCC and also the respective franchisees regarding the issue and we’ve come to a constructive and satisfactory resolution.”
“The franchisees are in breach of their franchisee agreement with what has occurred. We are satisfied with the outcome thus far and there will be no further action from Harvey Norman as a franchisor.”
Slack-Smith hopes that other franchisees can learn from this incident, specifically in regards to the new Australian Consumer Law. Before this law was enacted, the Trade Practices Act (1974) was the overarching law that needed to be followed. This has now changed.
“We are simply looking to understand and properly respond in order for our franchisees to learn from this incident and to move forward. This is new environment in consumer law, one [with] an increased level of both responsibility and process [for] all retailers [so] that we are complying with the legislation and ensuring that consumers are being clearly informed about the offers through advertising.”
“While it is very easy to fall back to the Trade Practices Act (1974), the new legislation that applies is the Australian Competition and Consumer Act of 2010, which was enacted on 1 January.”
Additional reporting by Patrick Avenell