Major company banning online sales

Discodog

Stihl, the garden machinery company, have banned their dealers from selling online. So you have to collect the item personally from a dealer. This results in price fixing. Is this allowed under EU competition law ?

ssmith6287

how?

Discodog

ssmith6287 wrote: »

how?

I assume that you mean how does this result in price fixing ? Simple, the dealers all charge about the same & sellers that will sell much cheaper are banned.

Water John

Well, when you buy a new car, you buy in a garage, not on line.
We all know the RRP of every car. Is that price fixing?
Whoever gives you the best deal, you buy from.

Discodog

You don't have to go to a dealer to buy a new car. The manufacturers were stopped from doing this years ago. No the RRP isn't gospel in the car trade. Dealers offer thousands in discounts. Plus there a car supermarkets that offer a huge range.

But if you contact a dealer miles away they will happily sell you a car. You can even import one from a UK dealer. A Stihl dealer isn't allowed to trade online or sell to anyone who doesn't collect the item.

Former Former

Discodog wrote: »

Stihl, the garden machinery company, have banned their dealers from selling online. So you have to collect the item personally from a dealer. This results in price fixing. Is this allowed under EU competition law ?

I don't see how you made the leap from:

So you have to collect the item personally from a dealer.

to

This results in price fixing.

Since you're accusing this company of a crime, would you care to expand your thinking?

Nody

Discodog wrote: »

But if you contact a dealer miles away they will happily sell you a car. You can even import one from a UK dealer. A Stihl dealer isn't allowed to trade online or sell to anyone who doesn't collect the item.

And what stops you from contacting a Stihl dealer miles away and go there and pick it up? Nothing. You're trying to connect two dots that simply don't connect.

Discodog

Nody wrote: »

And what stops you from contacting a Stihl dealer miles away and go there and pick it up? Nothing. You're trying to connect two dots that simply don't connect.

The cost & effort of travelling negates the cost saving, if there were any. But the reality is that the dealer miles away will charge you the same. I thought that free trade was a fundamental of the EU. Why can't a UK dealer sell to someone in Ireland ?

Discodog

Former Former wrote: »

I don't see how you made the leap from:


to



Since you're accusing this company of a crime, would you care to expand your thinking?

It's pretty logical. If the dealers know that people can only buy, in person from them, they can just stick to the rrp. So the price is pretty much fixed. It's effectively carving up Europe into cosy cartels.

Mercedes & BMW tried it years ago but the EU ruled it illegal.

witchgirl26

Discodog wrote: »

It's pretty logical. If the dealers know that people can only buy, in person from them, they can just stick to the rrp. So the price is pretty much fixed. It's effectively carving up Europe into cosy cartels.

Mercedes & BMW tried it years ago but the EU ruled it illegal.

It's not really price fixing though. Price fixing is when retailers of a product agree either with each other or with the manufacturer that they will all sell at a particular price and no changes to that. However my understanding is that if a manufacturer puts a RRP in place and it happens that all retailers use the RRP (as it provides a good return for them) then it's not price fixing. It's open to view what the RRP is.

Offers may not be allowed by the manufacturer in the sense that they will not sell to the retailer at a discount to enable a discount so that the retailer is forced to take a hit on any promotion they offer and depending on the size/nature of the retailer, they may decide to not offer any promotions as they wouldn't make enough selling the product to cover an offer. Again there is no onus on a retailer to ever offer a product lower than the RRP.

An example from a different type of product is Dior handbags. These are not allowed to be sold online by the retailers who stock them and are, 9 times out of 10, sold for the RRP but it's not price fixing. The retailer can choose to sell them cheaper but at their own cost.

Not allowing sales online does not automatically = price fixing. It can be a manufacturers way of ensuring that only authorised retailers are selling their product.

rubadub

Have you a link to this? I see plenty of their stuff on sale on amazon.

https://www.amazon.co.uk/s/ref=nb_sb_noss_2?url=search-alias%3Daps&field-keywords=Stihl

They might ask official dealers not to do it, but I guess there is nothing to legally stop others selling it, who could source it somehow, approved by Stihl or not. Just like shops can sell bars or cans out of multipacks once they have all the info required on them.

I remember getting shure earphones years back and they had a list of official dealers, all with the same RRP, some were cheaper as they were offering "free" shipping, so were still complying with Shures wishes. I got them for about half the price from an unofficial place. Not sure about nowadays but years ago prices of ipods would be the same.

Discodog

There is very little Stihl machinery on Amazon. Those chainsaw appear to being sold by Amazon themselves. They might be liquidate stock.

This is different in that it's a manufacturer directive. There are lots of dealers who would love to sell online.

There are dealers with big websites but they have had to add a banner regarding Stihl products.

I know one dealer, in the UK, that is trying to challenge this as their sales are severely down.

Lux23

If you think there is something in it there is no harm in reporting it to the CCPC, but if they aren't based here they probably wouldn't be able to do much.

witchgirl26

Discodog wrote: »

There is very little Stihl machinery on Amazon. Those chainsaw appear to being sold by Amazon themselves. They might be liquidate stock.

This is different in that it's a manufacturer directive. There are lots of dealers who would love to sell online.

There are dealers with big websites but they have had to add a banner regarding Stihl products.

I know one dealer, in the UK, that is trying to challenge this as their sales are severely down.

While it may affect retailers and they would like to sell online, if the manufacturer has decided that they don't want their products sold online for whatever reasons, they are entitled to do that and it's a case of the retailer either abiding or else not stocking the product anymore.

It still doesn't indicate price fixing. There would have to be a proven instance of retailers joining together in an area to agree to all sell at a particular price. Or alternatively the manufacturer telling the retailers that they are not allowed sell at any other price. However telling retailers that if they sell below RRP it's at their own loss, then it's not price fixing.

rubadub

Can you link to any product you do not think can be bought online? or any links about this policy -like the people trying to challenge this, do they think its illegal or are they simply asking Stihl to allow them to do it with their approval.

Can't see how they could be stopped, as said earlier it is not price fixing.

This place has info about not buying online

http://www.howardbrothers.com/2012/02/03/buy-stihl-products-online/

While these 2 have no such notice and appear to be selling online with delivery

http://www.caulfieldindustrial.com/p/stihl-ts410-consaw/p-226285
http://www.donegan.ie/index.php?cPath=43

Discodog

rubadub wrote: »

Can you link to any product you do not think can be bought online? or any links about this policy -like the people trying to challenge this, do they think its illegal or are they simply asking Stihl to allow them to do it with their approval.

Can't see how they could be stopped, as said earlier it is not price fixing.

This place has info about not buying online

http://www.howardbrothers.com/2012/02/03/buy-stihl-products-online/

While these 2 have no such notice and appear to be selling online with delivery

http://www.caulfieldindustrial.com/p/stihl-ts410-consaw/p-226285
http://www.donegan.ie/index.php?cPath=43

That first link has an interesting line

" We’re not supposed to show pricing online."

The others are Irish dealers who pretty much charge the same price.

Cheshire Cat

The first link is for a US site. The other two are Irish. Different areas, different rules, different legislation?

whiterebel

The first thing that strikes me is that the Stihl products can be heavy and/or awkward. Maybe they have made a decision that their products are too expensive to ship via online sales, or they may be having too many damages, resulting in losses on these sales.

Del2005

whiterebel wrote: »

The first thing that strikes me is that the Stihl products can be heavy and/or awkward. Maybe they have made a decision that their products are too expensive to ship via online sales, or they may be having too many damages, resulting in losses on these sales.

More likely they don't want to sell dangerous items to untrained individual. The amount of classes to use most equipment in industry now is crazy and only getting worse. For me to drive a caddy cart in work I had to do an online course and a driving test, for me to get a transit van from work I only need to show my drivers licence.

Discodog

Del2005 wrote: »

More likely they don't want to sell dangerous items to untrained individual. The amount of classes to use most equipment in industry now is crazy and only getting worse. For me to drive a caddy cart in work I had to do an online course and a driving test, for me to get a transit van from work I only need to show my drivers licence.

They claim that it's for safety reasons but, of course it isn't. There is no difference from opening a box, that came in the post & one that you collect. They don't give people training.

It's a clever way to control sales & prices. There was a dealer in the UK who sold a huge amount because they were experts & offered keen prices. They sent product all over the UK & Ireland. Now they can't. It's not just price fixing but also a serious restriction on free trade.

witchgirl26

Discodog wrote: »

They claim that it's for safety reasons but, of course it isn't. There is no difference from opening a box, that came in the post & one that you collect. They don't give people training.

It's a clever way to control sales & prices. There was a dealer in the UK who sold a huge amount because they were experts & offered keen prices. They sent product all over the UK & Ireland. Now they can't. It's not just price fixing but also a serious restriction on free trade.

I'm honestly still failing to see how it is price-fixing. The dealer you mention could still sell at "keen prices" but they would have to take the hit as opposed to expecting the product for cheaper. That is not price fixing. Is there any evidence that the manufacturer has colluded with dealers to set a price to sell the product at? RRP does not count as this as dealer still has discretion to charge more or less.

It's also not a restriction on free trade - manufacturers are entitled to determine by what method their products are sold. If they don't want them to be sold online, then that is their prerogative and dealers would sign up to those conditions when dealing with the manufacturer.

dudara

whiterebel wrote: »

The first thing that strikes me is that the Stihl products can be heavy and/or awkward. Maybe they have made a decision that their products are too expensive to ship via online sales, or they may be having too many damages, resulting in losses on these sales.

IMO the rationale is probably to protect their dealer network, and allow them to give reassurances to potential & existing dealers that they will make money from being a dealer. Stihl probably spend money training dealers and investing in promotional material with them, and they will want to protect that investment. If dealers are dropping out because of dropping trade, that's not good for Stihl.

Discodog

In Ireland the opposite appears to be true. Stihl use a sole distributor they don't deal direct.

They also appear to want a significant investment. My recently appointed dealer has no garden equipment experience at all. The Stihl section is separate & has no connection to the rest of the products they sell. They don't know the industry into which they are selling.

My local garden equipment supplier has a wide range but no Stihl. They chose Husqvarna because of the support & the freedom to sell to whomever they choose.

witchgirl26

Discodog wrote: »

In Ireland the opposite appears to be true. Stihl use a sole distributor they don't deal direct.

They also appear to want a significant investment. My recently appointed dealer has no garden equipment experience at all. The Stihl section is separate & has no connection to the rest of the products they sell. They don't know the industry into which they are selling.

My local garden equipment supplier has a wide range but no Stihl. They chose Husqvarna because of the support & the freedom to sell to whomever they choose.

If they are using the manufacturer-distributor-retailer model then the issue with which retailer is selling them is actually something the distributor determines and if they are not following their contract with Stihl over who is allowed stock etc then that's between the distributor and Stihl.

I'm still not seeing any evidence of price fixing at all. And if there's concerns of price fixing in Ireland, then it could be argued that it's actually the distributor who is potentially at fault not the manufacturer if they aren't dealing direct. They could be completely unaware of any collusion.

Discodog

I accept that there is no fixing in the legal sense. But effectively banning buyers in Ireland from buying online does seriously affect the price.

For example the attachment I need is about €150 online. It's €240 here. I wrongly thought that, especially with the EU, that I could buy from anyone.

ohnonotgmail

Discodog wrote: »

I accept that there is no fixing in the legal sense. But effectively banning buyers in Ireland from buying online does seriously affect the price.

For example the attachment I need is about €150 online. It's €240 here. I wrongly thought that, especially with the EU, that I could buy from anyone.

You are free to buy from anybody willing to sell to you. Nobody is obliged to sell to you. Stihl will only deal with you in person. It is just Stihl protecting their dealer network as somebody else said.

Discodog

ohnonotgmail wrote: »

You are free to buy from anybody willing to sell to you. Nobody is obliged to sell to you. Stihl will only deal with you in person. It is just Stihl protecting their dealer network as somebody else said.

Not correct. The online dealers want to sell to me but they are banned from doing so. A lot of them try to circumvent the rule imposed by Stihl. Others flaunt the rule but charge full price.

Stihl are certainly protecting their business. However there is quite a backlash in that UK buyers don't like being forced where they buy.

oppenheimer1

Discodog wrote: »

I accept that there is no fixing in the legal sense. But effectively banning buyers in Ireland from buying online does seriously affect the price.

For example the attachment I need is about €150 online. It's €240 here. I wrongly thought that, especially with the EU, that I could buy from anyone.

I think we are getting hung up on terms here. It sounds like this is not "price fixing" in the classic sense, but something that might be anti-competitive behaviour.

If a dealer is prevented from distance selling a product and thus maintaining price disparity across the market, then a true single market doesn't exist.

rubadub

This thread seems more suited to bargain requests. This is why I was asking this.

rubadub wrote: »

Can you link to any product you do not think can be bought online?

As I said earlier, Shure seemed to have similar rules, not banning online sales from dealers but asking them to charge the same.

Similare was (is?) in place for the likes of ipod or playstations. They could sort of circumvent it by offering bundles. But I rememeber when the PS1 was out they were all the same price for the base unit from authorised dealers , yet you could find grey area unofficial dealers selling for less.

If you went to buy an ipod from the US they would redirect you to the irish site charging a lot more.

ohnonotgmail

Discodog wrote: »

Not correct. The online dealers want to sell to me but they are banned from doing so. A lot of them try to circumvent the rule imposed by Stihl. Others flaunt the rule but charge full price.

Stihl are certainly protecting their business. However there is quite a backlash in that UK buyers don't like being forced where they buy.

i dont think banned is quite the word to use. As part of becoming a stihl dealer they have agreed to this condition.

I'm sure buyers dont like being forced where to buy. But where are they going to go for service and support if all the small dealers have closed down?

donegal.

what did we do before the internet when there was price fixing on literally everything?