NSW Is Minimum Advertised Price Legal Under Commercial Law?

[Tibo]

Hi there,

We work with wholesalers to distribute our products and we would like to offer pricing consistency to our retailers. I am interested in the concept if MAP (Minimum Advertised Price) but I am not sure if this is legal in Australia under Commercial Law.

Does anyone have an answer for me?

Thank you,

 

[Tim W]

It isn't.
Have a read of this.

 

[Tibo]

Thanks Tim for the quick and precise reply!

"MAP pricing does not limit the actual selling price. It simply sets the minimum price a product can be advertised at - whether that’s in print or online"

The ACCC does say that it is illegal to:

• stop resellers from advertising, displaying or selling goods from the supplier below a specified price.

However, I hardly see how companies such as Apple, with extremely consistent pricing internationally, could not be using such a tool even in Australia. Unless they are using a proforma sales model, which I doubt.

Thanks again,

 

[Tibo]

Or maybe is it legal to incentivize the fact to advertise our product above a defined price?

"If you were to always advertise our products above $10, you'd get a 5% bonus at the end of the year"

 

[Tim W]

Apple has been through the legal mill regarding retail pricing.
They know what the law is in the markets where they operate,
and they know that the regulators are watching.
In any event, they have much deeper pockets than you,
and can afford to defend a compliance action brought against them.

And no, what you call "incentivising" is not lawful the way you suggest.
In short and simple - anything you do that could cause the price to stay at an artificial minimum level,
is a no.

 

[Tibo]

Thanks a lot, Tim.

Very useful.