Been there got nowhere. Here's what I wrote to the OFT
"Having being the market to buy a certain type of powertool (a Festool Domino jointing machine) I checked the internet to find the best price however virtually every dealer is selling this item at the same price(£511 inc vat +/- £1). I went down to my local dealer who quoted exactly the same price. I asked for a discount but was told that the company or distributor wont allow them to discount any of Festools range of tools. He often gives me upto a 20% on virtually every other brand of tool. He said it's the same for all the suppliers. They have been told by Festool head office that they can discount accessories by up to 10% but no discount is allowed on the tools themselves. The traders have been told that if they are caught selling below the rrp then they will not be supplied with any more tools in the future. The fact that all the traders are selling at the same price appears to back this up. An discount apparently has to be o.k.'s with Festools head office. Surely this is at least uncompetitive behaviour and blatant price fixing not to mention the blackmailing of the traders.
What can be done about this?"
The reply,
"By way of background, the Office of Fair Trading (OFT) is responsible for making markets work well for consumers. We achieve this by promoting and protecting consumer interests throughout the UK, while ensuring that businesses are fair and competitive. Our primary duties include the enforcement of competition law, and the application of consumer protection legislation in respect of matters that adversely affect the collective interests of UK consumers.
The main law covering competition in the UK is the Competition Act 1998 (the Act). In brief, the Act contains two main prohibitions. The Chapter I prohibition prohibits price fixing or other anti-competitive agreements which prevent, restrict or distort competition. The Chapter II prohibition prohibits conduct by companies which amounts to an abuse of a dominant position.
The Chapter I prohibition prohibits agreements that ‘directly or indirectly fix purchase or selling prices or any other trading conditions’. This includes agreements where suppliers and retailers have agreed to set a minimum price below which prices are not to be reduced, a practice known as ‘resale price maintenance’. Resale price maintenance is considered by the OFT to be a serious infringement because it restricts a company’s ability to set its own prices, which harms price competition for consumers.
However, before any formal action can be taken under the Act, we would need evidence to suggest that the prices of these products are the result of some form of agreement. Although you note that there is little variation in the pricing of Festool power tools, we would require something more concrete in terms of written evidence of an agreement between Festool and suppliers to justify further investigation under the Act.
We appreciate the time you have taken in bringing this matter to our attention. Our intention, at this time, not to make further enquiries into this complaint does not preclude the OFT from revisiting the matter should further information come to our attention.
Yours sincerely"
So I wrote the same thing to Festool directly to which they responded...
"Thank you for your E-mail. Please accept my apologizes for the late answer, but I hope to address your concerns in full.
The business model used means that the supply of our products throughout the world is via distributors and we have no direct contact with the trade ourselves. We sell our products to distributors who then sell them to the trade, such as yourself.
Each distributor to whom we sell our products enters into an agreement with us which specifies the process by which it will sell our products. This ensures that our high standards are met so that the name of the company is not tarnished by the distributor; this is similar to the maintenance of goodwill in the instance of a franchise. A Recommended Retail Price is suggested for the products sold. Our distributor contracts are sent to the Office of Fair Trading before being signed by the parties to ensure that they fully comply with all relevant legal requirements including competition law.
The price paid to us by the distributor is fixed, it is not a percentage of the final selling price and it does not fluctuate, regardless of how much the product is sold for to the eventual purchaser.
We hope the above allays your concerns in this matter however if you have any further questions please do not hesitate to contact us.
Best Regards"
To be fair, at least they both responded. The complete lack of any bad attitude in the reply suggests to me that this is a question they are used to. I'd say that if you think its wrong then write the OFT a letter to but as for me I've already done my part.
