Trying to keep prices higher costs Sealy $30,000 penalty
Published03 Oct 1994
Bed manufacturer Sealy New Zealand Limited had a $30,000 penalty imposed on it for trying to stop a Christchurch store discounting its beds.
The Commerce Commission took the case to the High Court and Sealy admitted breaching the Commerce Act. The Act prohibits "resale price maintenance" - a supplier trying to set prices at which their products can be resold.
The case related to actions taken by Sealy in 1990 to prevent Christchurch retailer the Bedroom Centre advertising a 10% discount on Sealy's beds.
Sealy's South Island representative visited the shop and asked for the discount advertising to stop. He said the shop would be excluded from a free linen promotion if the advertising continued.
In court, Sealy acknowledged its representative and some other employees went too far in promoting the company's products.
Since the Commission's investigation, Sealy has actively promoted a compliance programme for its staff and representatives covering all aspects of the Commerce Act and the Fair Trading Act.
Media contact:Vince Cholewa, Communications Officer