ACCC fines Telwater more than $200,000

by Media Services on 17 Mar 2009 Telwater has falled foul of the ACCC, found guilty of breaching section 48 of the Trade Practices Act, one of only a few cases of 'resale price maintenance' in the past decade.

Back in January, the national competition watchdog accused Telwater, the country's largest aluminium boat manufacturer of illegally forcing retailers to prop up prices.

The ACCC alleged that Telwater engaged in resale price maintenance by making it known to dealers they could not advertise Quintrex or Stacer products below a specified price, referred to as the 'brochure price', which the organization referred to as “a breach of section 48 of the Trade Practices Act”.

The ACCC subsequently launched action against Telwater and its director, Paul Phelan, in the Federal Court in Brisbane.

Telwater is the manufacturer and distributor of the Quintrex, Stacer and now Savage brands.

While the law allows distributors to nominate a recommended retail price, they are forbidden from imposing that price on retailers by threatening to cut off supply. But distributors do have the right to cut off supply to a retailer that uses the product as a 'loss leader', selling it below cost price.

Resale price maintenance cases in Australia are rare. In 2005, the Federal Court imposed fines of more than $1 million on weight-loss venture Chaste Corporation and three individuals for resale price maintenance.

Following civil proceedings instituted by the Australian Competition and Consumer Commission (ACCC), the Federal Court of Australia has found that Telwater Pty Ltd engaged in resale price maintenance.

On the 5 March in the Federal Court of Australia (Queensland) orders where made against Telwater and the company was fined $210,000 plus $28,000 against Mr Phelan (MD) and court costs of $40,000 making a total of $278,000.