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price fixing hey...now what? does it actually help us?


mark ellis
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Update 13 June 2011: Competition Commission withdraws cycle industry price-fixing complaint.

Press release here: http://www.thehubsa....xing-complaint/

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so i been watching the whole price fixing thing with some interest as one of the shops, well ok actually two were on my local lbs store list. I bought my bike from the one in fourways and after that was treated like a t!t by they so moved to a shop just down the road from me and was really impressed, even joined their club, nice guys but again certain areas of service left some to be desired...but thats not the point of my post.

 

I been in Kenya for busniness and was there when this whole ugly price monster showed its head. I been in the market for a new stead for a while but cause i travel a lot have not rushed into anything.

 

So i go "window" shopping today....

 

first shop....my club..."local" bike shop.....

 

I know 2011 bikes will be out around november blah blah blah move the old stock blah blah blah......certain bike I been lookig at on and off suddenly on a masive sale...down 10k.....as well as most other bikes on the floor. bike i was told " we dont do discounts, you will get your 5% as club memebr" are now " lets talk prices" so off I go up to fourways to have a "look" at what they got............

 

I am hoping that what ever happened to that shop is just temporary! i have heard of saving space and cutting costs, but to try and fit that entire store that was in a large space into that little window shop is not going to work. which will be a shame, because if you are anything like me you like to touch stuff and as one hubber put it a while back "go into bike shops and lick stuff".

 

I got me thinking....has this price fixing thing already hit these guys hard? and just how much of a difference was this price fixing making to us the buyer? funny thing and not sure if related but stopped in at the Toyota in fourways and noticed a Porshe cayenne with "certain cycle shops" plates on for sale, moved to a RAV 4 apparently....

 

I dont know enough about the cycle industry to be able to know what these guys make on a bike, i am blessed and fortunate enough to look at top end bikes when i look, but not for one minute did i think they were making enough to go down 10k on prices. Being involved in mx and quad sales a few years back I know that even on those there is very little profit on the sale of the bike, most money coming from the services and kit after.

 

So my long.....long winded question is, will this actually make a difference to us the consumer? surely if these "big" guys stop buying the volumes they do from the international suppliers, they going to look at making it back on the smaller order shops?

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So my long.....long winded question is, will this actually make a difference to us the consumer?

 

Based on the bread price fixing or the Sasol fertilizer issue, two things, maybe three are likely. One, they slap a fine on the parties found guilty, like they did to tiger brands, nett result to consumer, fockall. Sasol fertilizer, initial fine, and now a ban on importing certain products so that they cannot again attain a place from which to be in a position to fix prices, nett result, dunno, I aint a fertilizer expert, but it sounds positive. And the third, I heard a while ago, that you could claim money back from the bread guys. Dunno how that works, or if it is true.

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They were going to get a fine,and that was about it. Which we will probably end up paying in their markup anyway.

 

Problem is most people have very short memeories since the scandal everyone was taking the micky out of the players, then someone posts a new post about cycle lab's new online shop and all of a sudden everyone is hopeing that cycle lab will give CWC a go. And woosh people rip out their credit cards to buy buy buy.

 

Nevermind that these guys were implicated in the price fixing debacle. Seems everyoby has forgiven and forgotten. I personally will never support any of those stores again.

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Based on the bread price fixing or the Sasol fertilizer issue, two things, maybe three are likely. One, they slap a fine on the parties found guilty, like they did to tiger brands, nett result to consumer, fockall. Sasol fertilizer, initial fine, and now a ban on importing certain products so that they cannot again attain a place from which to be in a position to fix prices, nett result, dunno, I aint a fertilizer expert, but it sounds positive. And the third, I heard a while ago, that you could claim money back from the bread guys. Dunno how that works, or if it is true.

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They were going to get a fine,and that was about it. Which we will probably end up paying in their markup anyway.

 

Problem is most people have very short memeories since the scandal everyone was taking the micky out of the players, then someone posts a new post about cycle lab's new online shop and all of a sudden everyone is hopeing that cycle lab will give CWC a go. And woosh people rip out their credit cards to buy buy buy.

 

Nevermind that these guys were implicated in the price fixing debacle. Seems everyoby has forgiven and forgotten. I personally will never support any of those stores again.

Being accused and being found guilty are two entirely different things. Lets wait for the outcome before we start burning witches at the stake. Besides we are all driving VW's and Toyotas - who are still colluding and screwing us over...

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@steve meltzer - appears your reply didn't update! Please requote as I am sure you have something valuable to add to this!

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The real value to us will be an open market system. This means that supply and demand will determine what the market related mark up is and not something determined in a secret meeting attended by a bunch morally inept so called businessmen.

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Being accused and being found guilty are two entirely different things. Lets wait for the outcome before we start burning witches at the stake. Besides we are all driving VW's and Toyotas - who are still colluding and screwing us over...

 

Sorry dude but this is the Hub it is normal to insult and burn first and in some cases under severe pressure to apologise later (very rare).

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From what I heard last week...only 4 or so of the shops on this list will pay the fine in the end. FP Cycles and the Lab one with the online store. Dont know if there is any truth in that. Went to a LBS in the Waterkloof Centre next to Mugg & Bean (the Beste(rs) cycles in the world) and they manager just came from their attorneys and told me that. They will not pay the fine

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From what I heard last week...only 4 or so of the shops on this list will pay the fine in the end. FP Cycles and the Lab one with the online store. Dont know if there is any truth in that. Went to a LBS in the Waterkloof Centre next to Mugg & Bean (the Beste(rs) cycles in the world) and they manager just came from their attorneys and told me that. They will not pay the fine

 

That's the problem now. You don't know who is implicated. If a shop's name appears on the list it doesn't neccesarily mean that they agreed to price fixing, it only means that they attended the meeting. But, I doubt that there will be only 4...

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If FPC and CL are the only ones to pay it is fine with me. They were the ones who called the meeting.

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If FPC and CL are the only ones to pay it is fine with me. They were the ones who called the meeting.

 

And the suppliers? I've perSonally Seen one of the biggeSt SupplierS puShing up their RRP right after the meeting.

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@Mark Ellis. (This is not an Attack on you just stating things as I see it)

 

1. The shop you are talking about (Cycle Lab), They are just revamping, the shop is going to still have the same size store.....

 

2. Cycle Lab Club is sponsored partly by Toyota if im not mistaken. So I think Maybe Andrew got a good deal on a Toyota. He drives a Fortuner if im not mistaken and Ali (his wife) drives the Rav4. (thats what her twitter feed said)

 

3. Ive been looking at there (CL) prices lately and they really not as expensive as everyone say they are. (that is in comparison to other shops).... Still think stuff is hell expensive though.

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@Mark Ellis. (This is not an Attack on you just stating things as I see it)

 

1. The shop you are talking about (Cycle Lab), They are just revamping, the shop is going to still have the same size store.....

 

2. Cycle Lab Club is sponsored partly by Toyota if im not mistaken. So I think Maybe Andrew got a good deal on a Toyota. He drives a Fortuner if im not mistaken and Ali (his wife) drives the Rav4. (thats what her twitter feed said)

 

3. Ive been looking at there (CL) prices lately and they really not as expensive as everyone say they are. (that is in comparison to other shops).... Still think stuff is hell expensive though.

 

Thats good, I was hopeing it was something like this, their store was nice and big and thought WOW, has this really hit them this hard they have had to move into this little space!

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  • 2 months later...

there so many threads on this damn subject, i chose this one, but it seems the price fixing charges brought by the competition commission might implode following a ruling by the supreme court on what sounds like lack of rigour on behalf of the competition commission. It's like when a gangbanger gets off cos the cop did follow procedure invalidating the arrest. honestly..

 

Ruling puts cartel cases in jeopardy

 

Lawyers embrace loophole

September 20, 2010

 

By Ann Crotty

 

Submit your comment

 

The Competition Commission's cartel cases against Omnia and Sasol, companies in the loungefoam industry and bicycle retailers are just some of the cases that could be challenged in the light of last week's far-reaching judgment by the Supreme Court of Appeal (SCA) in the Woodlands and Milkwood dairy case.

 

The essence of the judgment relates to the strength of the case that the commission must have before it initiates action against a company. In its ruling in the Woodlands/Milkwood case, the SCA said the commission's administrative penalties "bear a close resemblance to criminal penalties".

 

"This means that its procedural powers must be interpreted in a manner that least impinges on these values (of dignity and freedom) and rights (to privacy, fair trial and just administrative action)."

 

Because the SCA therefore regards an allegation of |anti-competitive behaviour as similar to a criminal case it imposed similar standards.

 

In the commission's case against Woodlands Dairy and Milkwood Dairy, the SCA found that these standards had not been met and set aside the case.

 

In addition the entire case against the alleged milk cartel could be set aside as a result of the judgment.

 

Within hours of the release of last Monday's SCA ruling, competition lawyers were advising clients who are currently under investigation by the commission to review the complaint initiation process.

 

In a note issued by Webber Wentzel last week, Robert Wilson, a partner at the firm, remarked: "The immediate relevance of the SCA's judgment is that respondents currently under investigation by the commission or before the (Competition) Tribunal in referral proceedings need to revisit the commission's initiation of the complaint against them and carefully study whether the initiating statement complies with the requirement set down by the SCA."

 

A note issued by law firm ENS remarked: "It remains to be seen how this landmark ruling will impact on current and future investigations by the commission, including in particular those that have already been initiated in vague and/or general terms in regard to the conduct of entire industries."

 

The rest here.

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