Retail Backlash Calls for Watchdog Intervention
The ACCC has been called on to intervene on behalf of consumers, after Fairfax publicised the fact that Australian fashion importers and wholesalers had brokered price protection deals with suppliers.
Last week, The Age revealed the growing number of Australian fashion importers and wholesalers that have made deals with suppliers in a bid to stop the sale of cheap branded items to our shores via international online retailers.
The story was widely read and was met with varying degrees of consternation from consumers and other retailers alike. Now, the ACCC may be about to become involved after it has begun receiving an increased number of calls to intervene.
Choice spokeswoman Ingrid just yesterday urged the ACCC to “have a closer look” at the practice.
“With the growth in online shopping and these emerging uncompetitive practices, I think it’s important that the ACCC remains vigilant in addressing these activities,” said Just.
Former ACCC Commissioner Stephen King, who is now a Professor of Economics at Monash University, said the that the actions taken by these fashion retailers would appear to contravene competition laws by way of price fixing or resale price maintenance, if these activities were accurately described by The Age. He said he would be surprised if the ACCC did not investigate.
Regardless of the legality of the scenario, the issue has highlighted just how little there is that retailers can do to maintain their margins in the face of cheap international online sales. As discussed last week by Power Retail’s guest contributor Chris Morley, freight-forwarding companies continue to offer consumers the ability to have items forwarded from US or European addresses, side-stepping any delivery moratorium to our shores and these services will only increase in popularity if these practices continue.
In the meantime, Australian consumer confidence is low and continues to remain low regardless of what happens with the ebb and flow of our post-GFC economy. Unfortunately, that seems to be the status quo for now. Yet how are these retailers responding? Every week there is a new call to lower the threshold on GST, thereby forcing the consumer to spend more. Every other week it’s a lobby movement towards reducing Awards and cutting penalty rates, thereby threatening some consumers’ livelihoods.
The public outcry that occurs every time retailers make these kinds of moves gets louder, with more individuals pointing out that the best way to protest is with their feet. Why wouldn’t they turn to online retailers who offer great products, prices and services and don’t paint themselves as greedy bullies in the media?
What do you think is directly hurting retailers more: international online competition, or the public damage they are inflicting on their own brands?