Competition Commission uncovers bike retailer cart

[OcTaLL]

PRESS STATEMENT

5 March 2009

Competition Commission uncovers bike retailer cartel

The Competition Commission has uncovered a possible cartel operating amongst local bicycle retailers aimed at increasing their margins.

The Commission has initiated an investigation and today issued summons against two cycle shop retailers, Fritz Pienaar of Fritz Pienaar Cycles and Andrew Mclean of Cycle Lab.

Background

The Commission is in possession of minutes of a meeting from which it appears that a group of bicycle retailers met to discuss how to work together to raise prices in order to increase their margins. The shop owners allegedly discussed ramping up the prices on cycling accessories to increase margins from 50% to 75%, ramping up prices of bicycles to increase margins from 35% to 50% and coordinating these increases to be introduced at the same time ? to be introduced on the 1

st October 2008.

The shop owners also discussed a plan to get certain wholesalers on board to back the above agreements by providing a new suggested retail price to the retailers they supply and advertise that price to the public.

It appears, from information received by the Commission, that discussions amongst the shop owners also included face-to-face meetings, purportedly in Gauteng and Cape Town.

Shan Ramburuth, Commissioner at the Competition Commission says it would seem there are more entities involved in this conduct and the Commission has initiated an investigation to uncover the true extent of this alleged cartel.

"That these retailers believed they could act together to increase prices with impunity is shocking. The Commission intends to thoroughly investigate this apparently blatant attempt amongst competing retailers to collusively raise prices to unsuspecting consumers."

The minutes from the meeting were posted to a forum on cycling website

www.thehubsa.co.za.

https://www.bikehub.co.za/forum_posts.asp?TID=33149&PN=13

(scroll down to the bottom of the page for the text of the minutes).

ENDS

Prepared by: FD Beachhead

Dani Cohen 021 487 9021 / 082 897 0443/

dani.cohen@fd.com

Jennifer Cohen 011 214 2401 / 082 468 6469 /

jennifer.cohen@fd.com

Senzi Dlamini 011 214 2420 / 073 494 0030 /

senzi.dlamini@fd.com

On behalf of: The Competition Commission

Further info:

Nandi Mokoena, Manager of Strategy and Stakeholder Relations

012 394 3286 / 082 399 1328 /

nandisilem@compcom.co.za

Keitumetse Letebele, HOD Communications

012 394 3183 / 082 783 3397 /

keitumetsel@compcom.co.za

Sourced from http://www.compcom.co.za/

[TNT1]

Nice. About fockin' time.

[AndreZA]

wow, first word I heard about this. Bastards!

 

 

 

 

 

.

[The Saint]

Again?

[Shebeen]

sweet, Epic is over and we can go back to slating AM and FP again.

anyone see the backpage ad cyclelab had on april Bicycling? goes on about how AM did a solo break in the argus vets category from 55km on his fancy cervelo.

 

very classy

[TNT1]

 

Bastards!

 

 

 

 

 

.

 

Again?

 

Still...

 

[Mudsimus]

Did I miss something?

[Tumbleweed]

i think it's an april fool's joke?not sure i get it though!

[Overlord]

Know of a few bikeshop owners that is going to have a few sleepless nights.

[TNT1]

 

i think it's an april fool's joke?not sure i get it though!

 

nope, it's on the competition commission website:

http://www.compcom.co.za/resources/Media%20Releases/Media%20Releases%202009/PR07_2009.pdf

 

[Spinnekop]

sweet' date=' Epic is over and we can go back to slating AM and FP again.

anyone see the backpage ad cyclelab had on april Bicycling? goes on about how AM did a solo break in the argus vets category from 55km on his fancy cervelo.

 

very classy

[/quote']

 

Did anyone see the front page.....Bicycling hang uit hierdie maand!!! 

[intern]

Tell you what, I didn't see anyone whining about price fixing when FPC was at Epic providing support and spares to all who needed them. And there were an awful lot of folks who needed them, wonder if some were the same hubbers baying for Fritz's liver with some fava beans and a nice Chianti.

 

I'd not previously bought anything from FPC, but they fitted a new set of Monorails with Stan's at 8pm on Saturday night, straightened by bent rotor and cleaned and lubed my chain and checked my gears. Only charge was for sealant and tyres. And all was done with a smile on their faces.

 

Even had the option of writing it down and paying later, but I produced the cash on the spot.

[The Saint]

It was that other Holy Roller guy who posted the minutes.

[The Saint]

Even had the option of writing it down and paying later' date=' but I produced the cash on the spot. [/quote']

 

Well at a 75% mark up you can afford to grant credit facilities.

[TNT1]

 

Tell you what' date=' I didn't see anyone whining about price fixing when FPC was at Epic providing support and spares to all who needed them. And there were an awful lot of folks who needed them, wonder if some were the same hubbers baying for Fritz's liver with some fava beans and a nice Chianti.

 

I'd not previously bought anything from FPC, but they fitted a new set of Monorails with Stan's at 8pm on Saturday night, straightened by bent rotor and cleaned and lubed my chain and checked my gears. Only charge was for sealant and tyres. And all was done with a smile on their faces.

 

Even had the option of writing it down and paying later, but I produced the cash on the spot.

[/quote']

 

Of course when you have been found out trying to ass rape the general public, a bit of damage control and well timed PR is pretty much de riguer?

 

[DawieO]

Took the words right outta my mouth TNT.

 

You can't rip someone off unless you can get them to do business with you...