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TOPIC: Competition Act & Pricing Regulation

Competition Act & Pricing Regulation 9 years 1 month ago #3111

  • Dylan Phelan
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I've often run into competition act issues / conversations.

I recently set up a new venture and came in with very competitive prices.

I just got this email from a supplier.

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When we started our business relationship you agreed to not deviate from our recommended retail price of R xx.xx on product YXZ.
We have received our first complaint from a good dealer that you have price of R xx.xx. Why this?

Please change immediately.

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Firstly - I never agreed to sell at a fixed price.
Surely this is in contravention of the Competition Act?
http://www.MSBonline.co.za - Web design, hosting, internet marketing & CRM
http://www.MSBaccounting.co.za - Pastel accounting & bookkeeping services.
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Re: Competition Act & Pricing Regulation 9 years 1 month ago #3112

  • Dylan Phelan
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Chapter 2 of the Competition Act includes a wide range of “prohibited practices”. These can conveniently be explained as falling into three broad categories:


1. THE FIXING OF MINIMUM RESALE PRICES.
A manufacturer or wholesaler may not dictate to a retailer (or anyone else in the vertical supply chain) a certain minimum price at which a product should be sold, or the maximum discount that can be given to a purchaser.

Any business purchasing the product should be free to sell the product at the lowest price that is feasible. This promotes competition and ensures that consumers receive products at the most affordable prices possible. Manufacturers or wholesalers may therefore only recommend a resale price, but the recommendation cannot be binding on the retailer.
http://www.MSBonline.co.za - Web design, hosting, internet marketing & CRM
http://www.MSBaccounting.co.za - Pastel accounting & bookkeeping services.
http://www.ecohub.co.za - Natural health & wellness
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