'Bicycle prices fixed'

[gummibear]

From Iafrica

 

The Competition Commission has referred its findings of price fixing against 28 bicycle wholesalers and retailers to the Tribunal for adjudication.

 

The firms face the allegation that they colluded to set the wholesale and retail prices of cycles and accessories. In addition, they are alleged to have excluded competitors from the market.

 

Wholesalers sent retailers a price list with the wholesale price and the recommended retail price on a regular basis. The recommended retail price includes a mark-up of 35 percent for bicycles and 50 percent for accessories. In turn, the ceiling on mark-ups also determined the profit/margin that retailers could make on cycles and accessories.

 

Bicycle retailers colluded to exclude competitors like internet retailers from the market. The stratagem employed was to ask the wholesaler to sell to independent retailers at a higher price. The Competition Commission believes this conduct is likely to harm competitors and consumers.

 

An administrative penalty

 

The Commission has asked the Tribunal to levy an administrative penalty of 10 percent on the annual turnover of each of the firms involved.

 

The firms facing these allegations include retailers Fritz Pienaar Cycles, Cycle Lab, Hotspot Cycles, Maverick Cycles, Dunkeld Cycles, Summit Cycles, Bester Cycles, Johnson Cycle Works, Salojee's Cycles, West Rand Cycles, Bowman Cycles, Winners Cycles.

 

Further it includes the following wholesalers: Thule, The Just Fun Group, Omnico, Cytek Cycle Distributors, Cape Cycle Systems, Silverback Lab, Shimano, Emotion Cycling, International Agencies, J&J Cycling, Le Peleton, Ravx Design, RFA Distributors, Supersport Cycling, Maillot Juine Trading and Bicicletta.

 

An anonymous tip-off

 

The Commission initiated this investigation on March 2009 following an anonymous tip-off, a complaint lodged by Yellow Saddle Cycling and admissions by some of the respondents during its investigation process.

 

During its investigation the Commission also found that the respondents met on various occasions in 2008 to discuss and agree on wholesaler and retail prices.

 

The Commission is in possession of minutes of a meeting, which took place on September 2008 in Gauteng between various retailers and wholesalers in the industry. At this particular meeting an agreement to increase retailers' prices and to fix prices, discounts and other trading conditions applied by wholesalers was concluded.

[Nobody]

F-em. CRC is now my new LBS.

Lets look at pedals, I would go for Shimano or crank brothers...Both ditributors implicated.

Either way we bending over for a good rodgering. Who are the distributors for SRAM?

[AndreZA]

So something is happening re this. Would like to see if the prices will drop or they just gonna pay up like the food companies and just continue with the high prices.

[Bike Mob]

Cape Cycle systems nobody... also implicated.

[splat]

The link

 

This appeared to be common knowlegde on The Hub when it was all hitting the fan. It took long enough, now its official.

So now what?

[AndreZA]

Who are the distributors for SRAM?

 

Sorry but Cape Cycle Systems is also on the list.

[Thug]

Interesting........

[Hairy]

Get a Set of Ritchey Pedals from Rush Sports ... .. will match some of your other components then too

[Skott5]

Nothing will happen and we will continue to get raped.

 

What do you guys consider to be fair mark up ?

[Eldron]

This is just ridiculous.

 

So the government finds them guilty and makes them give the governement 10%.

 

I wonder where the 10% shortfall in everyone's bottom line is going to come from? Ah yes. Us.

 

I believe we've just been double f*cked guvner...

[splat]

This is just ridiculous.

 

So the government finds them guilty and makes then give the governement 10%.

 

I wonder where the 10% shortfall in everyone's bottom line is going to come from? Ah yes. Us.

 

I believe we've just been double f*cked guvner...

 

Edd Zachary!

[Edge_Design]

I have a feeling a lot of this has quietly been fixed already (bicycle prices appear to have dropped considerably in the last few months). This could be due to pressure from this investigation, poor economy (doubtful) or the fact that they shot themselves in the foot by pushing up prices as CRC became a major player in the SA market thus giving ppl even more incentive to spend their money abroad. It is a nice change to see names being published together with a detailed report after what appears to have been a proper investigation, very unlike SA!

 

10% of annual turnover is a lot more than a slap on the wrist though so I presume there was some serious money involved in this issue.

[Kranswurm]

Nothing will happen and we will continue to get raped.

 

What do you guys consider to be fair mark up ?

 

35% on bikes

70% on parts and accessories

[AndreZA]

35% on bikes

70% on parts and accessories

 

and then they still charge you R250 per hour to fit the stuff.

[swiss]

My LBS - Cycle Fix in Pretoria East is not one- JIPPIIIIEEE

 

Well done it Wimpie!!

 

Still belief they are the best!!!!

[Edge_Design]

Nothing will happen and we will continue to get raped.

 

What do you guys consider to be fair mark up ?

 

I don't think the mark-ups are unreasonably high, but have a feeling the shops involved might not be paying the same as other, smaller shops giving them bigger margins than those claimed. I may be wrong, but it's a feeling I have from speaking to a few ppl and from seeing what the products actually cost from the manufacturers.