In Decision No. 20-D-20 issued on Dec. 3, 2020, the French Competition Authority fined the tea producer Dammann Frères €226,000 for forbidding its retailers to freely determine their own online resale prices for Dammann products between April 2015 and June 2017.
The premium tea manufacturer distributed "recommended" prices to its retailers in its annual catalog, encouraging the retailers to comply with what was shown in the catalog through the company's general terms and conditions and online distribution agreements.
Retailers were free to set the price of products in their stores but not on the Internet. The producer was then certain that the prices of the products sold on e-commerce websites would be aligned with its own online store prices, thus protecting it from any competition from its retailers.
A price monitoring policy was also implemented by the producer via its sales representatives and by some of the retailers, alerting Dammann Frères when they noticed prices lower than what was recommended.
Uncooperative retailers were then subject to retaliation and sanction measures such as the elimination of discounts granted to them, delays, or delivery cancellations. These measures could have included deregistration from the list of online retailers or unilateral termination of their business relationship with the tea manufacturer.
This retail price maintenance led to a reduction of intra-brand competition, depriving end consumers of the best price when buying their products online.
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