Two wholesalers in bicycle price-fixing charges get R4m administrative fines each

[Eldron]

I guess your reaction will be formed by your current view on LBS, gray imports, distributors etc.

 

As far as I am aware Fritz Pienaar had just gone belly up and the rest of the shops were a little nervous so shops and distributors got together to "ensure sustainability". Of course one man's sustainability is another man's "screwing the consumer"....

 

Plans were made but never came to fruition - I don't think the plans ever could work. Trying to control pricing across hundreds of stores in impossible when you don't know how much the end user is paying...

 

Ultimately none of this really matters because the situation resolved itself.

 

The fines are way too late and ridiculously skewed. What exactly did the squealers confess to? Meeting? Those that chose to defend did nothing different to those that didn't defend. No actual crime was commited here. Defending was always a risk anyway - you're in for a good R500,000 to defend yourself - do you pay the R500,000 now or risk losing more later. It's a financial gamble gamble not a indication of guilt.

 

One could argue that the "bust" forced the industry to stay honest but I think ye olde free market principle sorted everything out - when the local pricing of any article gets too high alternatives like CWC and CRC prosper.

[Paul Ruinaard]

I guess your reaction will be formed by your current view on LBS, gray imports, distributors etc.

 

As far as I am aware Fritz Pienaar had just gone belly up and the rest of the shops were a little nervous so shops and distributors got together to "ensure sustainability". Of course one man's sustainability is another man's "screwing the consumer"....

 

Plans were made but never came to fruition - I don't think the plans ever could work. Trying to control pricing across hundreds of stores in impossible when you don't know how much the end user is paying...

 

Ultimately none of this really matters because the situation resolved itself.

 

The fines are way too late and ridiculously skewed. What exactly did the squealers confess to? Meeting? Those that chose to defend did nothing different to those that didn't defend. No actual crime was commited here. Defending was always a risk anyway - you're in for a good R500,000 to defend yourself - do you pay the R500,000 now or risk losing more later. It's a financial gamble gamble not a indication of guilt.

 

One could argue that the "bust" forced the industry to stay honest but I think ye olde free market principle sorted everything out - when the local pricing of any article gets too high alternatives like CWC and CRC prosper.

Umm,

 

Not really - I remember clearly that things like Stan's kits almost doubled in price in Cyclelab and Fritz and the other store escapes me now. No reason - exchange rates etc were stable. I am not sure if it was noted on here but on other older MTB forums there was definitely an outcry.

 

So not only did they collude but they coordinated their plans and implemented them. That is pretty much fact.

 

So its great to see that actually something was done. The wheels grind slowly in the justice department but this time they got it right.

[Eldron]

Umm,

 

Not really - I remember clearly that things like Stan's kits almost doubled in price in Cyclelab and Fritz and the other store escapes me now. No reason - exchange rates etc were stable. I am not sure if it was noted on here but on other older MTB forums there was definitely an outcry.

 

So not only did they collude but they coordinated their plans and implemented them. That is pretty much fact.

 

So its great to see that actually something was done. The wheels grind slowly in the justice department but this time they got it right.

 

So one item doubling in price and some random internet chatter turns it into fact?

 

How exactly does a distributor force an lbs to fix prices? Do they send hundreds of staff members to stores to check till slips?

 

Each to their own I guess - if that is your opinion that is your opinion. My dealings with local distributors has been very different.

[Paul Ruinaard]

So one item doubling in price and some random internet chatter turns it into fact?

 

How exactly does a distributor force an lbs to fix prices? Do they send hundreds of staff members to stores to check till slips?

 

Each to their own I guess - if that is your opinion that is your opinion. My dealings with local distributors has been very different.

I think you need to read the history of the case and you may find that the details are in there. This was posted on many forums including the minutes of the discussion on here when they met. That alone is a crime i.e. meeting and discussing collusion and price fixing..

So they meet and prices randomly go up overnight, which is noticed and commented upon.

 

Later docs emerge minuting the meeting and the timing is the same.

 

And that is random chatter ? Sorry how do you reach that conclusion. thta chatter here on the hub is cited in the ruling.

 

People aren't as stupid as you think. They notice. Like i did.

 

Also they are later prosecuted by the competition commission.

 

But according to you this is all random chatter.

 

I don't think the competition commission takes hearsay and random chatter in to account when dishing out R 4m fines...

[MTBeer]

What's the story with Spaz Concept stores? I phoned 3 different stores for a price on Ground Control tyres and all 3 were exactly the same price - to the nearest cent. Is that not price fixing or what am I missing?

[Mongoose!]

is it Friday already ?

[FCH]

I believe being a specialized concept store you are not dealing with an completely independent retailer anymore; like buying a car; Toyota everywhere will ask the same price for a Hilux (a dealer can throw you a bone here or there) but the listed price is set. 

 

What's the story with Spaz Concept stores? I phoned 3 different stores for a price on Ground Control tyres and all 3 were exactly the same price - to the nearest cent. Is that not price fixing or what am I missing?

[GLuvsMtb]

What's the story with Spaz Concept stores? I phoned 3 different stores for a price on Ground Control tyres and all 3 were exactly the same price - to the nearest cent. Is that not price fixing or what am I missing?

Pretty much the same as Pick n Pay all over the country charging the same for their no-name baked beans...

[Eldron]

I think you need to read the history of the case and you may find that the details are in there. This was posted on many forums including the minutes of the discussion on here when they met. That alone is a crime i.e. meeting and discussing collusion and price fixing..

So they meet and prices randomly go up overnight, which is noticed and commented upon.

 

Later docs emerge minuting the meeting and the timing is the same.

 

And that is random chatter ? Sorry how do you reach that conclusion. thta chatter here on the hub is cited in the ruling.

 

People aren't as stupid as you think. They notice. Like i did.

 

Also they are later prosecuted by the competition commission.

 

But according to you this is all random chatter.

 

I don't think the competition commission takes hearsay and random chatter in to account when dishing out R 4m fines...

 

There is tons of info available on what the plans were but no facts on actual price increases.

 

In terms of accessories the collusion plan was this:

 

In a meeting, the companies had all agreed to increase their markup on bicycles to 50% from 35% and the markup on cycling accessories to 75% from 50%. Prices had been set to increase on October 1 2008.

 

So your Stans doubling "facts" are completely wrong. If the collusion has occurred your Stans would have only gone up by 16.67%.

[Escapee..]

I believe being a specialized concept store you are not dealing with an completely independent retailer anymore; like buying a car; Toyota everywhere will ask the same price for a Hilux (a dealer can throw you a bone here or there) but the listed price is set. 

 

The retail price is set by the OEM but the dealer can still decide at what price they are going to sell it.

[Tumbleweed]

I think you need to read the history of the case and you may find that the details are in there. This was posted on many forums including the minutes of the discussion on here when they met. That alone is a crime i.e. meeting and discussing collusion and price fixing..

So they meet and prices randomly go up overnight, which is noticed and commented upon.

 

Later docs emerge minuting the meeting and the timing is the same.

 

And that is random chatter ? Sorry how do you reach that conclusion. thta chatter here on the hub is cited in the ruling.

 

People aren't as stupid as you think. They notice. Like i did.

 

Also they are later prosecuted by the competition commission.

 

But according to you this is all random chatter.

 

I don't think the competition commission takes hearsay and random chatter in to account when dishing out R 4m fines...

If you know that history of the case, you will no doubt be aware of the costly start, then abrupt halt to it years ago. It was not a strong case, and I very much doubt the commission or tribunal paid any attention to what was said on the hub, and merely used the minutes posted as a start point. Hub discussions wouldn't make for credible evidence Edited June 1, 2016 by Tumbleweed

[FCH]

" a dealer can throw you bone here or there" 

The retail price is set by the OEM but the dealer can still decide at what price they are going to sell it.

[cdevil]

[BigDL]

The retail price is set by the OEM but the dealer can still decide at what price they are going to sell it.

Interesting. I was involved with a very very well known brand of outdoor products for a while and, if anybody discounted the RRP, they would find that every time they ordered going forward, their items were out of stock. This was done to protect the small dealers from the huge dealers. I must stress that this was not my end of the business. There are many ways to control price.

 

 

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[JXV]

Did some training on the competition rules and regs a few years back. The range of seemingly innocent activities that you should not engage in was an eye-opener.

 

For example : You are at a trade conference and an old friend who works for a competitor walks past...you are not supposed to even talk to him, let alone have lunch or heaven forbid, discuss sales figures.....

 

As for attending a meeting, regardless of the topic, just being in a room with a bunch of competitors automatically makes you guilty, even if you never said a word.

 

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[BigDL]

The retail price is set by the OEM but the dealer can still decide at what price they are going to sell it.

Interesting. I was involved with a very very well known brand of outdoor products for a while and, if anybody discounted the RRP, they would find that every time they ordered going forward, their items were out of stock. This was done to protect the small dealers from the huge dealers. I must stress that this was not my end of the business. There are many ways to control price.

 

 

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