Watchdog rejects putting a price floor on electrical goods, citing competition and rising price fears

The Australian Competition and Consumer Commission issued a draft decision today, refusing to allow retailers set a minimum price on a “wide range” of electrical goods like TVs, cameras and ovens.

Chairman Rod Sims says the ACCC is concerned giving the Narta buying group the power to set prices “will reduce competition between retailers and result in higher prices for consumers.”

The watchdog also expressed fears online retailers, who generally do not negotiate selling prices down from the advertised price like bricks and mortar retailers, may also be adversely affected by the proposals.

The Narta group, which consists of 30 major retailers, including JB Hi-Fi, Bing Lee, Betta Living and David Jones, made the price setting proposals to the ACCC.

The proposals, if allowed, would mean all retailers would be forced to advertise newly released and ‘premium’ goods like Smart TVs, cameras and espresso machines at exactly the same price, for a ten year period.

However, retailers could still sell electronic goods at lower prices, and the price setting applies to advertised/ promotion prices only.

The minimum advertising price (MAP) “would be the same for both in store and online [retailer] advertising,” an ACCC spokesperson told SmartHouse.

So, if consumers were looking for a bargain on a tablet or notebook, they would not be able to ascertain which retailer had the best price from ads alone, it seems.

The minimum advertising price for electronics (MAP) would be set by Narta senior management.

Budget brand Beko goods, recently launched in Oz and available through Narta, would also be part of the price setting agreements.

The decision to refuse Narta is not final, however, and the ACCC is now seeking submissions from interested parties.

“The ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment,” it said today.

SmartHouse contacted Natra and are awaiting a response.

The ACCC is likely to make its final decision on the issue later this year.