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Concerns Over Move To Set Minimum Advertised Prices On Power Tools

The ACCC has moved to disallow power tool distributer Stanley Black & Decker’s from setting a minimum advertised price for Dewalt brand power tools, accessories and attachments.

There are also concerns that other wholesalers in the market are trying to set minimum prices for power tools, without approval from the ACCC.

“We would be very concerned if this is occurring, as setting minimum prices or setting minimum advertised prices for products without lodging a notification is a breach of the Competition and Consumer Act, and we will consider taking action if the information is correct,” ACCC Commissioner Stephen Ridgeway said.

Stanley Black & Decker tried to argue that the minimum price would benefit consumer choice, because retailers would receive a higher margin for Dewalt products and would therefore be more inclined to stock a wider range of these products.

While acknowledging this, the ACCC concluded that ultimately there would not be a net benefit for consumers.

Although consumers would in theory be able to negotiate prices below the advertised price, it would impinge on consumers ability to find the best deal and negotiate.

“Consumers would also lose the opportunity to ask retailers to match another retailer’s lower advertised price,” Ridgeway said. “Consumers are, as a result, likely to end up paying more for Dewalt branded power tools.”

Such an allowance would likely lead to the retailers of other brands of power tools to follow suit, which could significantly increase power tool prices overall.

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