GPS - Navman accused of price fixing.

Author

Navman accused of price fixing.

John Tserkezis

2007-12-26, 10:33 pm

Primarily of interest to Australians only, I thought this would be very
dodgy considering the better reputation Navman (with the novices at least) has
here among the GPS crowd.
I really didn't think that the satnav industry was this cut-throat.

<http://business.smh.com.au/navigati...71226-1j1x.html>

SATELLITE navigation maker Navman has blamed its fear of powerful retail
giants for illegally forcing smaller retailers to sell its products at full price.

The company was this week fined $1.25 million by the Federal Court after the
Australian Competition and Consumer Commission took action against it for
price-fixing.

Two senior executives of the Australian subsidiary of the New Zealand
electronics company were also fined.

Navman's marine division general manager and a director of Navman Australia,
Christopher Baird, was fined $80,000. The Australasian sales manager for the
personal and car division, David King, was fined $30,000.

The fines against the company and the managers could have been substantially
higher as Justice Peter Jacobson said it was likely he would have recommended
they pay more had the ACCC asked for a heftier penalty. He said the $1.25
million was "at the very bottom of the permissable range"and King's penalty
risked "falling below" a suitable punishment.

In submissions to the court by both Navman and the ACCC, Navman said it tried
to stop small retailers from cutting prices on navigation systems in order to
"avoid complaints from some of its larger retailer [customers] about the
prices of other retailers".

Big customers included Harvey Norman, the Woolworths-owned Dick Smith
Electronics, Strathfield Car Radios and 14-store boating chain Whitworth's
Nautical World.

The 35 offences - between 2001 and 2004 - related to the bullying of retailers
which discounted satellite navigation systems.

The retailers were threatened with withdrawal of stock.

On July 6, 2004 Australasian sales manager King told a small store owner in an
email that the discounting was "damaging to Navman's relationships with other
retailers".

Three days later, a Gladesville-based regional Navman sales manager, Steve
Marriott, emailed a retailer to say "Strathfield [Car Radios] and Harvey
Norman advertise at full [recommended retail price] and Dick Smith have the
[Navman] in their current catalogue at $1988 [full price]".

Justice Jacobson said Navman's attempts to force retailers to sell only at a
price level set by the company was "a manifestation of price fixing among
retailers".

He said the attempt to force stores to keep prices high "was pursued in an
aggressive and high handed way by the company's most senior managers".

Baird was sacked while King was demoted but was still employed by a company
which bought Navman's business.

Baird told all Navman's 250 marine dealers in September 2002 that he would not
tolerate retailers who sold at a discount.

"There is only one issue that will stop Navman and that's discounting!! I will
not allow our great products to be prostituted - take the warning now!" he
wrote in an email.

A follow-up email in January 2004 said: "If you can't sell our products
without discounting, then I suggest it's time to sell any of our competitors'
products - simple as that!!" Navman Australia had a turnover of $29 million in
2004. The parent company's turnover was $NZ200 million.
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Joel Koltner

2007-12-31, 3:33 pm

"John Tserkezis" < jt@techniciansyndrom
e.org.invalid> wrote in message
news:47730250$0$2634
3$afc38c87@news.optusnet.com.au...
> A follow-up email in January 2004 said: "If you can't sell our products
> without discounting, then I suggest it's time to sell any of our
> competitors' products - simple as that!!"

How arrogant... to think that you product will fit the needs of *all* users,
rather than accepting that different users have different needs, hence your
unit has various pros and cons as do your competitors, so perhaps competiting
on price as well could be useful?

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