Fashion importers shut down cheap online sales but run price fixing risk

Fashion importers, including the International Fashion Group and Some Agency, have reached agreement with fashion brands to stop cheaper online sales from international sites, but they may be liable for price fixing according to a legal expert.

Jacki Bresic of importer the International Fashion Group, reached an agreement with popular US denim brands Paige Denim and AG Adriano Goldschmied to prevent major international online stores selling their jeans to customers here.

”It is the only way we can compete on price with these overseas websites and try to prevent more and more retailers from closing their doors,” she told Fairfax.

”When you’ve got overseas websites selling the same pair of jeans for $100 or $150 cheaper because they don’t have to pay the outdated taxes and duties that we do, then what hope do we have?”

Fairfax also reported that Some Agency, which imports Swedish brand Dr Denim, has negotiated with Dr Denim to prevent UK online store Asos selling the brand to Australian shoppers.

Bob Baxt, partner at Freehills and former chair of the Australian Competition and Consumer Commission, told SmartCompany that while he could not speak specifically about the deals made by the IFG and Some Agency, such agreements were likely to constitute retail price maintenance and breach the Trade Practices Act.

“Basically it is illegal for parties to agree not to sell below a certain price, if they are forced by a dominant player into this agreement, the dominant player is involved in aiding and abetting,” says Baxt.”

“Retail price maintenance occurs and there is no question that it does occur throughout Australia from time to time and the ACCC has been very successful in tackling this.”

“One of the most popular areas for the ACCC to pursue is players in the marketplace who have agreed to price fixing.”

Baxt says there is a process under the competition law for parties in competition to collectively agree something if that is in the public interest.

“Parties needing to compete against an overseas market, they might go to the commissioner and say they just cannot compete,” says Baxt.

“The commission can authorise and has authorised arrangements of that kind.”

Baxt says there are examples of people in professional services making such an application but he had not seen it in a retail context.