I recently enquired by email about discount from a Tudor dealer as there have been a number advertising 30% on limited models.
They advised "Unfortunately i wouldn't be able to discount anyTudor products due to Tudor not allowing us to."
I replied "I am pretty sure this is against the law, please see https://assets.publishing.service.go...428/oft911.pdf
"There are a number of signs that may mean a business you deal with could be breaking competition law. These include:• a supplier prevents you from selling their products at a discount"
If it is against the law, how are the likes of Rolex and Tudor getting away with it ?
Toying with the idea of making a complaint as OFT advise "Dealing with anti-competitive behaviour We rely on complaints to help us promote healthy competition and protect the interests of consumers and fair-dealing businesses. If you suspect a competitor, supplier, customer or any other business is infringing the law, you should contact the OFT with your concerns."
Would be interested in your thoughts.
They are safeguarding brand value and retailer margin, competition still exists when you buy a different brand at a lower price.
It is reasonable.
When you have one brand or two, competing in a large arena.
Options still exists.
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If you want to continue stocking a brand you might want to comply with the terms you sign up to with them. Yes you could of course discount them but come restock time you may not get the stock.Originally Posted by nitram
I always thought the whole rrp/srp thing was around companies setting a target price rather than anything else?
Not sure it’s illegal from your point of view but might be commercially sketchy between Tudor and the dealer.
Not sure who the retailer was but it's clearly not true as less popular models are discounted all the time - Goldsmiths for example regularly has less popular models in the window - take the Glamour range - it's easy to see them with a 1/3 off. I suspect it's a pat answer to try and shut down conversation about discounts on popular models.
edit: After doing a bit of reading - is the discounting of less popular models to fox the CMA? (see my post below).
Last edited by Alansmithee; 29th December 2020 at 11:57.
It is not illegal.
There are loads of products out there where prices are set firm by the manufacturer and are the same price at every retail outlet.
Rega for HiFi
Motorcaddy for Golf Trolleys
Are two that spring to mind immediately, You will never see their products discounted anywhere. I am sure there are plenty of others
Except these terms don't seem to be lawful under UK law and are known as Resale Price Maintenance (not to be confused with recommended retail price):
https://www.gov.uk/government/public...-for-retailersYou may worry that if you do not co-operate with a supplier’s price-setting policies, they will stop doing business with you. However, RPM agreements are usually unlawful because they prevent you from offering lower prices and setting your prices independently to attract more customers. If you have been involved in RPM with your supplier, you may both be found to be breaking competition law.
Casio got caught this year:
https://www.pinsentmasons.com/out-la...-cma-crackdownOn 29 June 2020, the CMA announced that it had fined two electronic instrument manufacturers, Roland and Korg, a combined £5.5m for forcing online retailers to sell at or above a minimum resale prices – the prohibited practice known as RPM. These latest cases follow fines the CMA imposed on Casio (£3.7m) and Fender (£4.5m) in relation to RPM, taking the total fines recently imposed by the CMA in the musical instrument sector to £13.7 million. In a separate case also publicised on 29 June, the CMA announced that it had reached a settlement with GAK, an online musical instrument retailer, after it admitted to engaging in RPM. GAK will pay a fine of £278,945 as part of the settlement deal reached with the authority.
An interesting aspect of that Roland case:
https://hsfnotes.com/crt/2020/07/02/...e-maintenance/Roland and Korg both used price monitoring software, making it easier for them to monitor real time pricing and ensure compliance by their retailers. In addition, both suppliers were also aware that their conduct was in breach of competition law and had taken steps to conceal what they were doing, but using its IT forensic tools the CMA nonetheless uncovered emails and messages from IT servers and mobile phones. Both companies admitted the infringement under the CMA’s settlement process, which resulted in a 20% reduction of the fine.
Last edited by Alansmithee; 29th December 2020 at 11:56.
Ermm.........................
"UK and EU competition law (Chapter I of the Competition Act 1998 and Article 101(1) TFEU, respectively) prohibit agreements and concerted practices that prevent, restrict or distort competition.
Where a supplier restricts the ability of a retailer to set the prices at which it will resell the supplier's products, for example by requiring the retailer to sell at a specified price, prohibiting discounts or fixing the maximum level of discount, then this will generally infringe competition law."
Mitch
There have been some big European cases as well about this:
https://ec.europa.eu/commission/pres.../en/IP_18_4601Asus, Denon & Marantz, Philips and Pioneer engaged in so called "fixed or minimum resale price maintenance (RPM)" by restricting the ability of their online retailers to set their own retail prices for widely used consumer electronics products such as kitchen appliances, notebooks and hi-fi products.
The four manufacturers intervened particularly with online retailers, who offered their products at low prices. If those retailers did not follow the prices requested by manufacturers, they faced threats or sanctions such as blocking of supplies. Many, including the biggest online retailers, use pricing algorithms which automatically adapt retail prices to those of competitors. In this way, the pricing restrictions imposed on low pricing online retailers typically had a broader impact on overall online prices for the respective consumer electronics products. Moreover, the use of sophisticated monitoring tools allowed the manufacturers to effectively track resale price setting in the distribution network and to intervene swiftly in case of price decrease. The price interventions limited effective price competition between retailers and led to higher prices with an immediate effect on consumers.
Not illegal. However it’s a sure fire way to piss Tudor off if they have asked you not to.
We are talking 3-4 months ago but Goldsmiths offered me a discount on a Tudor Black Bay Heritage. Beaverbrooks wouldn't budge.
Last edited by markbannister; 29th December 2020 at 17:03.
The law is the law and the real world is the real world.
In the real world I don't need to prevent you from discounting, I simply need to suggest it to you.
Think you may have hit the nail on the head. Probably nothing in writing...same way nothing in writing from the same group instructing dealers not to put Rolex steel sport models in the windows and best to keep them tucked in safes.
Pretty much this, regardless of the legality of the matter if they are asking you not to do something and you go ahead and do it most likely they will just stop using you as a dealer.
Was there not something similar with Rolex a few years ago with their less wanted watches (bi metal, datejust, 11600 etc) being sold at a discount quite frequently.
Another thing to consider for Tudor though is quite a lot of their line up is hardly flying off the shelves and is pretty much on permanent discount. It may be a bit counter productive for them to do this. Was there not talk of IWC buying back stock rather than them selling at discount? IWC seem to still be had at a discount though....
Never heard of price control being against the law although does remind me of the Tesco/Levi’s jeans case.
Suspect your reply didn’t get a discount either, OP, as per Tesco, if you want a better deal buy pre-owned or from a grey dealer.
My thoughts are that you're debating making a complaint against a retailer because they wouldn't offer you a discount.
Do you also haggle for clothing or at the Waitrose till?
This is how it goes with the strong brands, it's illegal to dictate the prices but in reality retailers need to follow them if they want to continue as retailers.
While possibly unintentional by the OP, when I read his post it did give the impression that he felt that the retailer was obliged to give him a discount and when they didn’t he’s decided to make a complaint. I’d expect that the retailer has discretion over discounts, but in this case deferred blame to the manufacturer so that they wouldn’t be seen as the bad guy.
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They’re not going to admit to a discount in N email. Either ring them or pop in to the shop
I agree with this, especially with the wide choice of retailers for their brand. If you can’t manage to sell their items at full whack then they will either ship the desirable stuff to those that can or find a whole new partner to do the job.
No the complaint would be against Tudor for imposing such controls on its dealers.
My view is that dealers should have the right to decide if they want to discount, but manufacturers (according to my understanding of UK law) do not have right to dictate that they do not.
That’s correct. The manufacturers do however, have the right to choose who they supply their watches to.
I remember that and it sent shudders for Bang & Olufsen. They quickly wanted current dealers to devote a minimum of space in stores before they could become a dealer.
Then it was only available as a franchise dealership only retailing B&O.
That was the only way they could prevent Tesco from selling it.
I couldn't raise the money for the franchise so had to relinquish my years of being a dealer.
To be fair, the opposite for food retailers. They have a monopoly/oligopoly (although technically it’s a monopsony) but instead of inflating prices to consumers they force suppliers to provide discounts to consumers and provide bogof etc. Farmers have been hit for years.
Other watches from other brands are available.
I have heard back from Sales Manager who advised "I could discount my products by whatever I want. Tudor cannot stop this. Tudor can however just simply stop supplying us goods, which they have a right to do at any point as per our dealership contract."
This does seem to be contrary to UK law which is intended to encourage competition.
As others have said, there are other brands.
I do buy alot of watches and one of the ways I restrict this is to only buy when I feel I am getting a good deal :-)
Veblens gonna veblen.
Yes, I fully agree. I never ever understand why people bitch about (lack of) discounts.
You go into a store, try on a watch, ask if there is any movement on the price and then buy or don't buy.
Some shops make it clear the price is the price, I don't have any problem with that.
Some shops, particularly those with pre-owned pieces are open to negotiation. This is often enhanced if you are a "good customer". It's been this way for ever.
I favour a jeweller locally for gifts, I nearly always buy pre-owned, the pieces on offer are far nicer in the main than the new stuff. I've bought loads of things over the years, I do get the odd call if a desirable watch turns up. One of the key things is the low staff turnover in the shop concerned. I find that my local WoS seems to go through staff at a huge rate.
This is one of those "way of the world" problems.
There is not a luxury brand out there that wouldn't take some action against a seller that repeatedly ignored their RRP and sold at a massive discount.
Such activity simply undermines the pricing structure that the brand creates (with great care) for their range, which itself is pitced at a quality, value and cost point which is the key to every luxury item there is.
They are bound to protect their place in the market, even if it inherently seems a little unfair to some.
The only thing that differs between the brands is the scale of response they make to the amount of discounting by any retailer, and they need to pitch that carefully to avoid falling foul of the law.
Personally I see that it is the brand's right to defend it's price/value structure. I don't mind it at all.
D
I suspect the ruling scared a few suppliers that want to protect brand image and therefore costs, sorry to hear that common sense did not prevail in your case. Interesting to see that today some B&O products sell in the likes of Curry’s.
As an aside, a girlfriend ran a Jewellery store and she said if the product wasn’t clearance it was usually the manufacturer that determined which models could be discounted or included in sales, might be different these days as that was around 15 years ago.
It’s a completely different industry based on small margins and increased footfall to drive overall revenue. This means that market share is extremely important. Very different to the watch market...
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It’s all relative I guess, the markup on some of these things is incredible, also I’ve found frequently discounted watches tend to loose more when resold, not a problem if you always intend to keep but for those with a moderate turnover of products you can sometimes take a bath on it.
Alternatively OP instead of a discount why don’t you try and get something thrown in like a free service or additional NATO strap.
Last edited by christech81; 30th December 2020 at 18:11.
Agreed. And they’ve been investigated extensively by the CC multiple times. It’s widely acknowledged they are an oligopoly, but one that benefits consumers so not an issue. But they screw suppliers, which is apparently fine.
Completely different market than mechanical watches but similarities none the less.
As an aside I have no issue with what watch retailers and manufacturers do. It’s not for me but I’m happy for them to crack on
It’s like Rolex. Rolex ADs generally don’t discount at all now. Could an independent AD sell something at cost price? Of course as it’s their stock. However they’d need to have a pretty good reason or be able to back up why they did it or they’ll lose their agency if found to be discounting (excessively in the brands eyes). Many Rolex agencies have been lost in the past over discounting.
It’s brand protection. If Harrods started selling Prada/Gucci handbags at a discount (never happens), they’d have the brand withdrawn from them.
Pretty basic when it comes to brands of a certain tier tbh.
You seem to have spent quite a bit of time on something that I would have thought every member here would know. Not quite sure what you want to achieve by this thread, however if you’re still ‘toying’ with the idea of complaining to the OFT, that’s more time you can allocate to the subject. Let us know how you get on.
It is illegal....
essentially it is 'restrictive practice' under the Anti-Competition laws..
https://www.fleetnews.co.uk/news/200...ng-case/10364/
much of the law stems from the days when dealers themselves not manufacturers where forming 'cartels' to price fix many had set scales and printed them for their respective sales teams...
I was in a GM dealer council and when somebody in the room (dealer) brought up the subject that we should be retaining more margin in a certain new model and we should all agree to knock a maximum of 'XYZ' Off...the meeting was stopped and the dealer advised that what he was suggesting in the room would in the eyes of Mario Monte be 'Price fixing' ..which is highly illegal and can create big fines for any and all involved in 'price fixing' attempts...
"On 15 May 2020 the Council of the Antimonopoly Office of the Slovak Republic ("CAOS") changed the first-instance decision of the Antimonopoly Office of the Slovak Republic ("AOS") dated 3 February 2020 and imposed fines totalling of EUR 6,7 million for a cartel agreements between dealers of Volkswagen motor vehicles".
where manufacturers work to 'price fix' / 'control dealers' pricing policy the fines are a % of their annual turnover...which for somebody like VW / BMW can be massive.......
https://www.theguardian.com/business...0its%20guitars.
If a manufacturer infers to a (discounting) dealer that their advertising is too err aggressive or upsetting their neighbouring retailers or affecting the brands reputation or more importantly 'residuals' ...the manufacturers representative is breaking the law....
however as said there are other ways and means that manufacturers take out retribution to dissuade dealers from discounting - reduced supply or - stuff...
Last edited by TKH; 31st December 2020 at 14:56.
If a retailer purchases stock (excluding consignment) for x amount then it is up to them to determine when to offer discount. Most manufacturer and retailer agreements will have a clause in for the manufacturer to buy back unsold stock, so in the case of less popular models it's in both parties interests to move stock accordingly. The manufacturer will make its sale price and the retailer will be allowed to determine the profit it makes on the model.
Then again who knows what arrangement there is between Rolex putting their foot down with retailers when it comes to pushing Tudor out the door.
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