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Category:
Insurance
News /
Medical
Aid /
September 2008
Dis-Chem Punished For Low Prices In Price Fixing Battle
Struggling
to keep up with the ever-increasing prices on products, consumer
budgets may be threatened even further by a battle between retailers
and suppliers. This is due to Clarins Group Brands (Pty) Ltd's
claim that Dis-Chem is in contravention of the Copyright Act by
sourcing Clarins products from other suppliers. Clarins aims
to prevent the importing and selling of its products in South Africa
without its permission. However, the company's move to clamp
down on Dis-Chem's freedom of trade could be seen as
anti-competitive.
In an
attempt to ensure exclusive trading of its products in South Africa,
Clarins Group Brands (Pty) Ltd, the South African distributor of the
major beauty brand, Clarins, has issued a legal warning to discount
pharmacy group Dis-Chem to stop their sale of Clarins products.
Clarins
South Africa claims that it holds exclusive rights to reproduce what
it labels as `copyrighted works' in South Africa, and that it
accordingly holds the exclusive right to import and sell such
products. Dis-Chem, however, is sceptical that Clarins can
rely on the Copyright Act in such a way, since the intention of the
Copyright Act is not to control the trade in products, but rather,
to protect the creators of artistic and other works.
"We deny
contravening any laws," says Ivan Saltzman, Managing Director of
Dis-Chem. "And in this case, should intellectual property
rights be applied in this way, it would be an infringement on our
right to trade freely, and would not be in the interests of the
public."
Saltzman
feels that using the Copyright Act as a way to prevent Dis-Chem from
trading Clarins products in South Africa can only be labelled as
anti-competitive behaviour since Clarins are likely to have made
trade deals with departmental stores in which they have promised
exclusivity of trade. "It looks like they're attempting to stop
Dis-Chem plain and simple, due to price-fixing," Saltzman adds.
"Parallel
importing is widely practised in photographic, TV, and computer
outlets, amongst others, and what we are doing is no different.
The public are quite aware that we stand by our own guarantees of
quality and authenticity," adds Saltzman.
According to
the Competitions Act of 1998, no company may exercise business
practices that restrict competition in the market place. This
is to ensure that both equity and efficiency are achieved within the
economy. "Parallel importing, as well as providing competitively low
prices is not illegal," comments Dis-Chem's attorney, Mark Saltzman.
"Dis-Chem
has been issued with similar legal warnings from other South African
cosmetics distributors in the past. Nothing has come of such
threats as they are simply bullying tactics in order to safeguard
anti-competitive practices," concludes Mark Saltzman.
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