Meredith Dairy had complained to the Australian Competition and Consumer Commission (ACCC) that it should be allowed to stop retailers sell its goat’s cheese below a certain price due to concerns its products are being unfairly discounted to lure shoppers into stores.
The ACCC said on Wednesday that the company had not proved that leaving the price unregulated would “jeopardise ongoing investment in its business”.
Meredith argued that smaller retailers were advertising special deals to compete on price with bigger stores and major supermarkets and that the discounting had led to demands from other retailers for lower wholesale prices.
“We consider that the proposed conduct would not result in a net public benefit,” ACCC Commissioner Roger Featherston said.
“The proposed minimum retail prices would mean retailers who are currently offering cheeses at lower prices to consumers could no longer do so.”
The proposed minimum retail prices would mean retailers who are currently offering cheeses at lower prices to consumers could no longer do so.
ACCC’s Roger Featherston
“It would also reduce the competitive pressure on other retailers to offer lower prices, including major supermarket chains.”
Mr Featherston said the ACCC believed retailers should be able to charge prices as they see fit and not be “forced by Meredith Dairy’s wishes”.
Meredith Dairy said in a statement that it wanted to ensure shops weren’t selling its products “very cheaply” to entice customers into stores.
It referenced the 2017 “Harper Review” into Australian competition law, which it claimed recommended a relaxing of the rules around setting minimum retail prices by suppliers.
“Meredith Dairy has filed this notification because the pricing conduct of a very small number of retailers have given rise to suspicions that it is dealing with its customers unfairly, favouring some over others.
“Without the protection provided by notification, however, Meredith Dairy has felt unable to act. Meredith Dairy of course seeks to ensure that it treats all its customers and retailers fairly.”
It is illegal for a supplier to try and set a minimum price for its product but it may recommend a price to be charged.
Suppliers may withhold supply if a retailer sells goods at a lower price than cost, when that retailer’s purpose is to attract customers who are likely to buy other goods.
Meredith Dairy will not take such action, ACCC said.
Australian goat’s cheese, particularly Meredith’s, has been wildly successful in the United States. One Australian cheesemaker joked goat’s cheese was “like crack” to Americans.
