RMweb Premium Ian J. Posted March 16, 2012 RMweb Premium Share Posted March 16, 2012 If the trade letter in question was read properly....it would be understood that Bachmann are not attempting to price fix the Recommended Retail Selling Price ....... they are saying that to discount more than 15% in their opinion ...can lead to businesses becoming unstable and unable to give the kind of backup and presentation of their products that they wish to see, it is still up to the retailer whether he sells at full RRSP or discounts ...or even charges more than RRSP .... It is not a case of just propping up some of the smaller shops ...it is also trying to make sure some of the bigger ones don't wobble either ... Regards Trevor .... The quote given by 'red death' earlier mentions: ...(a) directly or indirectly fix purchase or selling prices or any other trading conditions... If that is so, then it's quite possible to read indirectly to mean any variation of price fixing, including any way it might be discounted. Link to post Share on other sites More sharing options...
Ravenser Posted March 16, 2012 Share Posted March 16, 2012 I think there is some confusion as the issue is not Bachmann acting as part of a cartel. A manufacturer acting alone is also in the wrong Taken from the OFT site "Anti-competitive agreements which affect trade in the UK are prohibited under Chapter I of the Competition Act 1998 (Chapter I) and, where they affect trade between European Union (EU) Member States, Article 101(1) of the Treaty on the Functioning of the EU (Article 101(1))." and "If you supply goods for resale, for example to a wholesaler, distributor or shop, it will also generally be illegal for you to agree a minimum price at which those goods may be resold." It says "generally be illegal" but there does not seem to be anything in the act where it is deemed to be acceptible Perhaps, like furniture stores, if the RRP price was realistic, there would be no need to discount? Furtinure stores sell a £2000 RRP sofa for £800 because thats what its worth These are two seperate issues. "Anti competitive agreements" means a cartel , and is covered by Art 86 (as was) which became Art 82 , and now seems to be Art 101 of the Treaties, and by mirroring national legislation. You cannot have an agreement with yourself - Art 101 requires multiple parties to collude before it applies. Resale Price Maintenance is different. It's when the supplier tells the retailer he must not sell below a price set by the supplier. It was largely outlawed in the mid 60s in Britain - though the Net Book Agreement was the notable exception (The publisher printed the price on the back cover and that's what all the bookshops charged) Art 101 cannot catch you if you act alone. Art 102 may, if you a) have a "dominant position" and B) abuse that market power. For "dominant position" read monopoly or near monopoly... But as I think Bachmann's market share is going to be a long way below 50% I can't see that applying here The European Treaties have nothing to do with this - the question is whether Resale Price Maintenance is legal , which aseperate issue, though it also falls under the OFT. . Ian J If that is so, then it's quite possible to read indirectly to mean any variation of price fixing, including any way it might be discounted. "Price fixing" means two competitors agreeing between themselves what prices they will charge customers , rather than competing on price. It is different from Resale Price Maintenance Link to post Share on other sites More sharing options...
RMweb Gold Revolution Mike Posted March 17, 2012 RMweb Gold Share Posted March 17, 2012 Sorry Ravenser, but that is not necessarily correct - Article 101 talks about undertakings and in this case the multiple parties in this case would be the manufacturer and retailers colluding to the detriment of the consumer. Given how vague some parts of EU treaties are (though my area is really the environmental parts and bits on the internal market functioning rather than competition) I would want to be pretty sure that I had solid legal advice! Having been (rightly) lectured about the risks of falling foul of EU competition law it isn't an area I would want to get into. Cheers, Mike Link to post Share on other sites More sharing options...
Pennine MC Posted March 17, 2012 Share Posted March 17, 2012 If the trade letter in question was read properly... Emphasis noted Trevor, but if Bachmann or retailers believe this policy is going to go totally without comment, they're being a tad naive. In fact it would probably be better if it was all up front, it would avoid the rumours that have beset other manufacturers in this regard. Perhaps, like furniture stores, if the RRP price was realistic, there would be no need to discount? Furtinure stores sell a £2000 RRP sofa for £800 because thats what its worth Sadly, most customers dont seem to be able to make much of a judgment in that way, they can only do it by reference to what they're told they are 'saving' New prices came into effect from 10.03.12 across the whole range new, old and not released items. That is were the price increase comes from Well done, 40F, for making a post that didnt include the words 'I think you will find' Link to post Share on other sites More sharing options...
Guest dilbert Posted March 17, 2012 Share Posted March 17, 2012 I'm not sure why Bachmann is being singled out here! There is no solid basis for the OP - maybe someone who has a copy of the letter would like to post it ? Without this, any comment remains speculative and irrelevant IMO and should have been treated so from the outset. . dilbert Link to post Share on other sites More sharing options...
RMweb Premium John M Upton Posted March 17, 2012 RMweb Premium Share Posted March 17, 2012 I think you will find there is solid basis in this very thread. Two well respected retailers (sunshine coast of Eastbourne and Trains4U) have both posted here confirming existence of said letter and clarifying what it is saying. After eight weeks when the 'must have it the moment it lands off the boat' brigade have had their fill retailers can discount to their hearts content anyway and every year Bachmann have a warehouse clearing hence the amazingly cheap five car Class 221 Cross Country Voyagers around at the moment along with other knocked down goodies. Also I don't see this stopping at the counter discounts at smaller shops which sometimes occur at the proprieter's discretion. One thing I have noticed oddly is that at one time Retailer Ltd Editions always used to be fifteen to twenty percent more than the equivilent standard catalogue model. With lead times between commissioning and delivery being what they are, strangely some Ltd Editions are now equal or in a few cases cheaper than the catalogue mass production equivilent!! Personally I am waiting for the plain 350/1 Desiro to be discounted, it will be worth the wait. Link to post Share on other sites More sharing options...
MRDBLUE17 Posted March 17, 2012 Share Posted March 17, 2012 Whilst I can understand the various comments concerns about the letter Bachmann has sent to retailers from a customers point of view the questioning of the legal side of things is strange. Bachmann like any company suggest an rrp. You can charge more or less as a retailer. Only they know what margin they need to maintain to make a profit. Retailers in any sector margins are extremely tight due to other costs rent rates energy which have all increased dramatically whilst sales have been falling due to the economy. Bachman are a brand they can ask retailers not to discount as they have done so and the only way they can enforce this is indeed to stop supplying that retailer. They are not trying to price fix but have tried to set some conditions to create a fair market place for all it's retailers. We clearly will still get discounts of up to 15% on new releases and after 8 weeks be able to pick up some bargains. I don't see much change other than rrp increases which again are not surprising given rising costs in china. A lot of brands especially luxury brands operate this way and have done for years. It maintains there brand integrity and value and many of them have been around for many years especially fashion and beauty houses. Mark Link to post Share on other sites More sharing options...
darren01 Posted March 17, 2012 Share Posted March 17, 2012 Hi I was looking at my emails just now and had one from rails of Seffield and they have had to put up this on thier email;PRICE CORRECTION: £29.95 DUE TO UNEXPECTED Bachmann PRICE INCREASE So have Bachmann just put all thier prices up?, two days ago they where selling them at £22.50. Darren Link to post Share on other sites More sharing options...
Ozexpatriate Posted March 17, 2012 Share Posted March 17, 2012 My informed position on English retail laws comes to a sum total of zero, so I don't have much to add. The whole discussion reminds me of protectionism versus free trade debates of the 19th century - a very big topic during Australian federation. (I don't remember this period personally, but there was definitely mention of it in my formative school years.) Nevertheless, if we can stipulate that having as many, local, smaller retailers as possible is a good thing, then they need to be able to confidently place orders for new releases and stock them without the anxiety that they won't be undercut by other providers while demand is high. I have no idea how this can best be done within the constraints of English retail law but it doesn't seem wholly unethical for there to be pricing guidelines during this period. While it is not strictly relevant to this discussion, I can add that my local (US) retailer does have different discounting policies from different wholesalers. He gives me a different discount depending on the source of the item. So this sort of thing does happen in the land of free market capitalism. Link to post Share on other sites More sharing options...
RMweb Premium Mike Bellamy Posted March 17, 2012 RMweb Premium Share Posted March 17, 2012 Hi I was looking at my emails just now and had one from rails of Seffield and they have had to put up this on thier email;PRICE CORRECTION: £29.95 DUE TO UNEXPECTED Bachmann PRICE INCREASE So have Bachmann just put all thier prices up?, two days ago they where selling them at £22.50. Darren See post #73 yesterday Link to post Share on other sites More sharing options...
Mike at C&M Posted March 17, 2012 Share Posted March 17, 2012 DUE TO UNEXPECTED Bachmann PRICE INCREASE Almost without exception, every time the annual announcement of the next years' range is made by any of the major manufacturers', then there is a price increase. Recently, these increases have often proved quite sizeable! I fail to grasp how a major seller cannot have anticipated that a price rise was due from Bachmann when the 2012 catalogue ranges were announced. I also know that Bachmann absorbed a substantial price rise from China in the autumn, so as not to increase prices in the UK market at that time. Link to post Share on other sites More sharing options...
Trains4U Posted March 17, 2012 Share Posted March 17, 2012 The whole Bachmann range has been subject to a price increase of around 12.5% (Though I think Sound engines might be more - to the point where the price differential makes it cheaper to pay me to fit an aftermarket SWD chip) If Rails have whacked on an immediate price increase, it shows they don't have those items in stock. I don't feel it is necessary to increase my prices until I receive new stock at the new trade prices. The price increase is hefty and did make me wince when I saw it, but with enforced wage increases in china, spiraling raw materials and transport costs, it was bound to happen eventually. I just didn't think it would be all at once! I have thought for a little while that the prices of Bachmann models have been remarkably low in comparison to the unit prices of models from Hornby, Heljan and Dapol. I guess its time to buy less rolling stock and start building that layout you've been promising yourself for the last 5,10,15, 20 years... Link to post Share on other sites More sharing options...
Ravenser Posted March 17, 2012 Share Posted March 17, 2012 Sorry Ravenser, but that is not necessarily correct - Article 101 talks about undertakings and in this case the multiple parties in this case would be the manufacturer and retailers colluding to the detriment of the consumer. Given how vague some parts of EU treaties are (though my area is really the environmental parts and bits on the internal market functioning rather than competition) I would want to be pretty sure that I had solid legal advice! Having been (rightly) lectured about the risks of falling foul of EU competition law it isn't an area I would want to get into. Cheers, Mike Mike: My whole point is that manufacturers and retailers are not agreeing to collude. This is a unilateral circular. Nobody has agreed anything. The implication might be that retailers who did not play ball with Bachmann's wishes might not be supplied, which is how these sorts of conditions were enforced in the past. You might try to construct an argument about abuse of a dominant position , but not about price fixing /cartel law This is not about EU law on cartels - this is about possible resale price maintenance , which in the UK was largely made illegal well before we joined the EEC (I believe the right to resale price maintenence was abolished in 1964). I suspect the get-out clause here is the 8 weeks limit . Having had some involvement with several major EU competition cases in shipping, which involved wading through an awful lot of lawyers submissions to the EU courts and arguments about what a block exemption actually permitted, I have a little idea what is considered to constitute price fixing Theft is not assault - even if both may land you in court Link to post Share on other sites More sharing options...
Trains4U Posted March 17, 2012 Share Posted March 17, 2012 I'm not sure why Bachmann is being singled out here! There is no solid basis for the OP - maybe someone who has a copy of the letter would like to post it ? Without this, any comment remains speculative and irrelevant IMO and should have been treated so from the outset. . dilbert Sorry, but it certainly won't be me. As far as I'm concerned the content of the letter is confidential between Bachmann and the recipient Besides, I wouldn't want to be inadvertently used as an opener for a can of worms. If Bachmann want everyone to know, they are free to put it on their website. Link to post Share on other sites More sharing options...
Mike at C&M Posted March 17, 2012 Share Posted March 17, 2012 Sorry, but it certainly won't be me. Nor me. But what I will say is that the relevant points have already been discussed within this thread. Link to post Share on other sites More sharing options...
Trains4U Posted March 17, 2012 Share Posted March 17, 2012 I'm not suggesting by the above that I have something to hide, or that there is anything more contentious than has already been posted. I just don't believe it is appropriate to post the letter without consent of the sender. Link to post Share on other sites More sharing options...
RMweb Gold PhilH Posted March 17, 2012 RMweb Gold Share Posted March 17, 2012 As a parallel theme to this I do wonder if there is a tipping point whereby toy trains, surely some of the most superfluous addenda to already stretched household budgets, will simply become too expensive for regular purchase. Link to post Share on other sites More sharing options...
RMweb Gold Ian Hargrave Posted March 17, 2012 RMweb Gold Share Posted March 17, 2012 I really don't understand how this is going to improve relations with customers - if anything it will make them more determined to shop round for a bargain. And please don't tell me that every high street model shop is a mine of helpfulness, information and customer service, because they're not. It might be alright for those with higher incomes who can afford to introduce a degree of altruism into their purchases, but there are a hell of a lot of people who can't afford to do that. Three cheers for a dose of healthy sanity in all of this. In any case--just WHERE is my nearest 'high street model shop' with the stock and knowledge to cater for my needs ? In your dreams,gents. Link to post Share on other sites More sharing options...
Guest Natalie Graham Posted March 17, 2012 Share Posted March 17, 2012 From my periphal involvement with the model railway trade it was always intriguing that the retailer who was our biggest customer was also the one who sold our products at 15% above the rrp. A well established and respected model shop with a successful business model that didn't rely on discounting. Link to post Share on other sites More sharing options...
RMweb Gold Oldddudders Posted March 17, 2012 RMweb Gold Share Posted March 17, 2012 As a parallel theme to this I do wonder if there is a tipping point whereby toy trains, surely some of the most superfluous addenda to already stretched household budgets, will simply become too expensive for regular purchase. Whether that happens only time will tell, but it is certainly relevant to the present discussion, because the whole hobby is entirely discretionary, and there is no real-world "hardship" endured by those who find their £ doesn't go as far as it did last year. For that reason, I am certain that whether Bachmann have or have not been guilty of anything, they will not find anyone chasing them - these are luxury items, and no-one dies in a ditch for want of buying them. Link to post Share on other sites More sharing options...
Guest dilbert Posted March 17, 2012 Share Posted March 17, 2012 Sorry, but it certainly won't be me. As far as I'm concerned the content of the letter is confidential between Bachmann and the recipient Besides, I wouldn't want to be inadvertently used as an opener for a can of worms. If Bachmann want everyone to know, they are free to put it on their website. And that's a position which is perfectly acceptable. But without knowing the context of the letter, the speculation moved to questioning the legality of Bachmann's approach and the introduction of EC rules/regulations etc... not exactly helpful... dilbert Link to post Share on other sites More sharing options...
RMweb Gold Oldddudders Posted March 17, 2012 RMweb Gold Share Posted March 17, 2012 Three cheers for a dose of healthy sanity in all of this. In any case--just WHERE is my nearest 'high street model shop' with the stock and knowledge to cater for my needs ? In your dreams,gents. The High Street as a concept has sadly passed its sell-by date, with out-of-town and Internet retailing the flavours of the day. But I think it is a little unfair to those who do pay rent on a bricks-and-mortar shop - as evidenced by a couple of contributors to this thread - to suggest they have all followed the dodo into obscurity. The fact is they were never in every town, they each had their own strengths and weaknesses, and the way we shop now has reduced their number - but they do still exist. As I said earlier, keeping them healthy is good for us all, too. Link to post Share on other sites More sharing options...
RMweb Gold The Stationmaster Posted March 17, 2012 RMweb Gold Share Posted March 17, 2012 As a parallel theme to this I do wonder if there is a tipping point whereby toy trains, surely some of the most superfluous addenda to already stretched household budgets, will simply become too expensive for regular purchase. Perhaps I'm an example in one area? (on a pension and mortgage free) Biggest spending change is definitely cutting back on diesel. Holidays - our main 'holiday' last year was a couple of nights in a pleasant hotel for Members' Day at Stafford, haven't been on a 'big holiday' in paid accommodation for several years. Hobby spending - spending on books is reasonably constant; on models etc it is partly market driven (i.e. if something is suitable for my era/area I try to get it because it will only cost more next year), visits to exhibitions is mainly local and by train whenever practicable. (BTW my modelling spending is not normally with the big box shifters but with a couple of good model-railway shops plus oddments from a local model shop, and what I can get for a good price at auction sales; the last loco I bought from a major box shifter was a D95XX from Hattons). So that's me and getting back on topic the 'Bachmann letter' won't impact on me because the folk I buy from are - in my view - generally prudent, and not predatory, in managing their pricing. Link to post Share on other sites More sharing options...
Doughnut Posted March 17, 2012 Share Posted March 17, 2012 Well speaking as just an ordinary punter, in these very financially pressing times, I feel the 'Tipping point' has been reached. I would agree with a previous poster that it it has the flavour of the protectionism outrage. With food prices, petrol prices,household energy prices and petrol/diesel prices all going up on a weekly basis, this couldn't have come at a worse time! Model toys that are now regularly sold at £100 plus will definately not be on my priority list. They must be Mad!! Link to post Share on other sites More sharing options...
RMweb Gold Ian Hargrave Posted March 17, 2012 RMweb Gold Share Posted March 17, 2012 The High Street as a concept has sadly passed its sell-by date, with out-of-town and Internet retailing the flavours of the day. But I think it is a little unfair to those who do pay rent on a bricks-and-mortar shop - as evidenced by a couple of contributors to this thread - to suggest they have all followed the dodo into obscurity. The fact is they were never in every town, they each had their own strengths and weaknesses, and the way we shop now has reduced their number - but they do still exist. As I said earlier, keeping them healthy is good for us all, too. Not my intention in any way to annihilate such places--far from it---but surely a seemingly aggressive and draconian price hike---is the proverbial sledgehammer and nut situation and the road to the law of diminished returns. I and many others like me have no access to such little jewels. I am reliant upon the web and visits to exhibitions. Believe it or not,my nearest reliable modelling shop---and I use the word carefully--is some 40 miles distant----'Rails'. Link to post Share on other sites More sharing options...
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