kb-network    News 04 Jul 2017

The BMA warns companies of strict pricing rules after a domestic lighting dealer is fined £2.7m

The Bathroom Manufacturers Association (BMA) has reminded k&b businesses of the dangers surrounding Resale Price Maintenance (RPM), after a dealer is fined £2.7m for dictating online resale prices. 

RPM occurs when a supplier and reseller agree that the reseller will sell the supplier’s product at or above a particular price. However, RPM can also be achieved indirectly as a result of restrictions on discounting, or where there are threats or financial incentives to sell at a particular price. 

The BMA explained “RPM is completely illegal because it constitutes vertical price fixing, preventing resellers from offering lower prices and setting their prices independently to attract more customers. 

“Competition law exists to protect businesses and consumers from anti-competitive behaviour. In the domestic lighting case, the CMA found that the supplier broke competition law by dictating the minimum prices at which resellers could sell its products online. In an open letter to all retailers, the CMA highlights the important points that are relevant to all businesses where there is a supplier/reseller relationship.” 

The BMA went on to warn “If your business ever receives, or previously received, a CMA warning letter you MUST take it seriously. The supplier in the domestic lighting case ignored a previous warning letter and received a 25% fine uplift for doing so.” 

They concluded, “The BMA urges that everyone takes this area of the law very seriously indeed. The costs of getting it wrong are immense.”

Bathroom Manufacturers Association | bathroom-association.org