Price fixing

[hubner]

It seems the UK gov has cracked down on musical instruments price fixing.

Synthesiser manufacturers Roland and Korg have been fined a total of £5.5million for breaking competition law.

Keyboard-maker Casio and guitar firm Fender were also recently fined £3.7million and £4.5million respectively.

https://www.gov.uk/government/news/musical-instrument-firms-to-pay-millions-after-breaking-competition-law

https://www.gov.uk/government/case-studies/45-million-fine-for-fender-for-illegally-preventing-online-price-discounts

https://www.gov.uk/government/publications/restricting-resale-prices-an-open-letter-to-suppliers-and-retailers-in-the-musical-instruments-sector

Maybe next should be the cycle industry (Brompton etc)?

[Jakob W]

Much though Brompton's aggressive price maintenance annoys me, it's all legal and above board, isn't it? Price fixing would be if they got together with Tern and Dahon to ensure nobody sold folders below a certain price.

[Pedal Castro]

It seems the UK gov has cracked down on musical instruments price fixing.

Sounds like a racket to me! 

[fuaran]

Much though Brompton's aggressive price maintenance annoys me, it's all legal and above board, isn't it? Price fixing would be if they got together with Tern and Dahon to ensure nobody sold folders below a certain price.

Not necessarily. "Resale price maintenance" can be illegal and anti-competitive. ie if they supplier tells the shop they can't sell below a certain price. It is reducing competition between retailers. Doesn't have to be any other suppliers involved. That is what Fender were fined for.

https://www.gov.uk/government/publications/resale-price-maintenance-advice-for-retailers/resale-price-maintenance-advice-for-retailers

[Mr Larrington]

It seems the UK gov has cracked down on musical instruments price fixing.

Sounds like a racket to me! 

Surely that would fixing the price of tennis bats?

[rogerzilla]

AIUI Brompton simply refuse to supply any retailer (e.g. Spa) who offers significant discounts.

[Jakob W]

Much though Brompton's aggressive price maintenance annoys me, it's all legal and above board, isn't it? Price fixing would be if they got together with Tern and Dahon to ensure nobody sold folders below a certain price.

Not necessarily. "Resale price maintenance" can be illegal and anti-competitive. ie if they supplier tells the shop they can't sell below a certain price. It is reducing competition between retailers. Doesn't have to be any other suppliers involved. That is what Fender were fined for.

https://www.gov.uk/government/publications/resale-price-maintenance-advice-for-retailers/resale-price-maintenance-advice-for-retailers

Interesting; RZ's point fits with what I've heard elsewhere about Brompton, which at first sight would then appear to be RPM...

[LittleWheelsandBig]

I believe that Brompton do not stop retailers selling Bromptons at below recommended retail price but reserve the right to decline orders from bike shops if their production is fully committed. Since all Bromptons are built to order and their backlog varies from several weeks to a few months, they are always justifiably able to decline orders that they do not want to fulfil.

[fuaran]

Sounds similar to what Casio were fined for. https://www.gov.uk/government/case-studies/why-we-fined-casio-37-million-for-breaking-competition-law

The fear of sanctions from Casio was a clear deterrent for resellers not to drop their prices. In one exchange, a reseller specifically referred to this and asked for Casio’s blessing to set their own prices, saying:

    can you please urgently give us your assurance that we can now compete in the market place, particularly at this time of the year, without:

    a. The threat of having our trading terms being changed for the marketing support column price to the standard trade column price and

    b. Casio conveniently running out of stock in response to any orders we place.

[LittleWheelsandBig]

Brompton never hold stock of completed bikes, so there is no differential treatment of retailers. I believe this is a significant point but I am not a lawyer. They seem to have found a strategy that works for them.

[Adam]

I believe that Brompton do not stop retailers selling Bromptons at below recommended retail price but reserve the right to decline orders from bike shops if their production is fully committed. Since all Bromptons are built to order and their backlog varies from several weeks to a few months, they are always justifiably able to decline orders that they do not want to fulfil.

They're increasingly ignoring bike shops and deliberately making their existing dealers wait at least 8 weeks for delivery, as they can make more money selling direct and send them out to the consumer within a week.

[asterix]

It seems the UK gov has cracked down on musical instruments price fixing.

Sounds like a racket to me! 

A fiddle, shirley?

[Beardy]

It seems the UK gov has cracked down on musical instruments price fixing.

Sounds like a racket to me! 

A fiddle, shirley?

They’ve obviously not needed to drum up extra business.

[LittleWheelsandBig]

I believe that Brompton do not stop retailers selling Bromptons at below recommended retail price but reserve the right to decline orders from bike shops if their production is fully committed. Since all Bromptons are built to order and their backlog varies from several weeks to a few months, they are always justifiably able to decline orders that they do not want to fulfil.

They're increasingly ignoring bike shops and deliberately making their existing dealers wait at least 8 weeks for delivery, as they can make more money selling direct and send them out to the consumer within a week.

True. Brompton seem to be progressively burning the goodwill of their retailers, save for the few dealers authorised to perform major service tasks.