COMMENT:JB Hi Fi has no plans to sell the iPad 2 under cost, but just imagine what would happen if they did? It would drive people to their stores with a high probability that many would spend their savings on other products in their stores.
Should this be allowed? Or should Apple have the final say as to the price that the hot Apple product can be sold by retailers, in the same way that Fosters is now trying to control the cost of grog in Australia.
This is a big issue and the Australian Competition & Consumer Commission (ACCC) has to step in immediately as judge and jury of an issue that could explode across several categories.
Because if Foster get away with what is basically a case of trying to fix the price for their grog, the consumer electronics and IT industry could quickly follow, with retailers forced to sell product at the lowest price set by distributors like Amber Technology, who last year stopped supply to Digital Cinema because the retailer was sourcing stock originally sold by Amber via JB Hi Fi who was able to negotiate cheaper prices than what Digital Cinema could.
It would also stop the likes of JB Hi Fi offering the new iPad 2 for less than what Apple is selling the product for, a move that would drive thousands of consumers to their stores with JB Hi Fi hoping that they buy accesories or other products at the same time.
Originally, Fosters stopped shipments of several beer brands to supermarket operators after discovering that retailers intended to sell slabs of the beer for $28 which was under the recommended retail price and cheaper than what some retailers could buy the grog for wholesale.
Today the grog war has spread to wine, with revelations that Fosters has moved to covertly buy back a substantial load of Penfold’s wine in what The Australian is claiming were guerrilla-style raids on Coles First Choice stores.
Staff from Fosters, which owns Penfold’s, grabbed about 100 cases of the winemaker’s celebrated Bin 389 being sold at the loss-leader price of $37 a bottle, The Australian reports.
The celebrated shiraz wholesales for $44 a bottle and usually costs drinkers $65 a pop.
Fosters said that they had made a strategic decision and was saving its beer brands from being tarnished.
On 1 January 2011, the Trade Practices Act 1974 was renamed the Competition and Consumer Act 2010. This act clearly deals with price fixing which is what the Fosters versus supermarkets issue is all about.
The ACCC, who are very quick to take on online retailers like Kogan Technologies and smartphone operators appear to be dragging the chain with Fosters and the supermarkets.
If the ACCC do not step in and arbitrate immediately, it will be sending the wrong message to the market or alternatively be showing that the renamed Competition and Consumer Act is ineffective across all industries.
Fosters — which plans to split its wine and beer operations into separate companies later this year — has been struggling from a global grape glut, the high Australian dollar and weak global markets.
In contrast, the nation’s major retailers have gone from strength to strength and are estimated to have at least doubled their share of beer sales over the past five years to claim more than half the market.
Several analysts have said that they do not believe the retailers were being held to ransom. Fosters was just laying down the law on its beer being sold below cost.