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lynne
Jan 17, 2003, 7:03 PM
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I just got this newsletter from Barrabes:
Quote:At Barrabes.com the New Year means new projects and ideas. But, how can we talk about such projects without first offering an explanation to those clients who have, no doubt, felt offended by the rise in price on certain products and the lack of stock on others?
During the last few months, several manufacturers of outdoor equipment have ceased to supply us, while others have forced us to increase prices on the products sold to the USA and the UK. Hence, some of the products which were previously available, without difficulty, no longer appear on our website and yet they are available if purchased from other parts of the world. In the same way, our publicity has been refused by some of the most important mountaineering and climbing magazines in the aforementioned countries.
More than anyone, we want to be able to offer our clients the widest range of products, at the most competitive prices and with the best service possible, and it is hard to understand how this can pose a threat to any free market. However, the pressure we have found ourselves subject to, during the last few months has forced us to change our sales policy. And this has proved to be detrimental for everyone, to you and to us.
There is more in the newsletter, but not relevent to the point of this post.
The outdoor industry is corrupt. Price fixing in the US violates federal laws. While Barrabes is obviously not in the US and I don't pretend that US laws should apply worldwide (duh), this very same thing is done in the US as well, to outdoor shops (as well as US on-line vendors). If they don't sell at MSRP they don't get their stock orders filled in a timely manner. Sometimes shops are pulled as suppliers completely, with other reasons cited by the mfg. Clearly this is being done to Barrabes and will likely happen to other international suppliers, and soon.
While I hate to see our local retailers suffer, the price fixing practices do not allow them to be competitive. Internet commerce is here to stay and the manufacturers need to wake up. As one example, prices for climbing shoes in the US are much higher than in Europe. There is no magic to why - mfgs feel we can/will pay more for them in the US and obviously they are strong arming vendors to make sure we have to do just that. They suck. I may give in and try out these Mad Rock shoes afterall. (What model would be closest to a Sportiva Miura?)
This topic has been beaten to death on rec.climbing, maybe here too, I dunno. If so, I apologize, but I thought it would be helpful to get this info from Barrabes out there.
[ This Message was edited by: lynne on 2003-01-17 11:03 ]
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dirko
Jan 17, 2003, 7:36 PM
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Word.
It is time for US companies to wake up, and for foreign retailers to grow a pair.
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dirko
Jan 17, 2003, 7:39 PM
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To see additional misguided BS, read Duane Raliegh's editorial in climbing #213.
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pbjosh
Jan 17, 2003, 7:43 PM
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I'm all for supporting my local climbing shops, but the price disparity is unreal. Free market rules mean free market, and if that means that US companies can't stay in business selling shoes for $60 instead of $140 then I'll die climbing in Sportiva's.
josh
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cedk
Jan 17, 2003, 7:45 PM
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Do you guys get on automotive message boards and complain about the fact that you can buy a Mercedes for much less in Europe?
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lynne
Jan 17, 2003, 7:54 PM
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cedk, I can walk into a Mercedes dealership and talk them down $10k or more in price. However my local climbing shop has to sell at MSRP or risk losing their best lines. This is illegal in the US and it also stifles competition. I believe it will ultimately put the brick and morter shops out of business. Very sad irony.
I applaud Barrabes for explaining what is happening openly, though people in the business already knew. Barrabes also have some programs in place to ID international mfgs with better price/performance ratios. They are a great vendor to work with.
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hallm
Jan 17, 2003, 8:01 PM
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There was a previous thread on this as well.
I practice antitrust law and looked into this issue.
First, US antitrust laws (Sherman and Clayton Acts) do, in fact, apply outside of the US if the effect of the acts complained of are felt in the United States.
However, in order to fall within the ambit of the US antitrust laws, one of two things needs to be shown.
1) concerted action on a horizontal level. That means that we would need to find evidence that either manufacturers of climbing equipment, acting together, are forcing the increase prices and other anticompetitive rules on foreign e-commerce sites, or that US resellers of climbing equipment are getting together to pressure manufacturers to do so. If there is evidence of this, then there is likely a violation of US antitrust laws going on.
2) we would have to find a monopolist in the climbing equipment industry that is using its monopoly power to force anticompetitive reselling practices (such as minimum resell price maintenance) on resellers into the US market. Typically, to find monopoly power, a single company needs to have around 70% market share for the relevant market.
There are state unfair competition laws that might apply. One thing to do is give a call to the U.S. DOJ competition department and explain the situation to them to see if they have any interest in pursuing it. Otherwise, if I can get some buy-in from some people here, maybe I will pursue it.
Anyone here in California interested in being a named plaintiff on a class-action suit on this?
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lynne
Jan 17, 2003, 8:04 PM
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hallm, do the US antitrust laws also apply to non-US manufacturers?
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dirko
Jan 17, 2003, 8:14 PM
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I really wish that this issues could be solved out of court, because we don't need climbers suing climbers.
But shoes cost twice as much here!
Climbing shoe companies, I hope you are reading this!!!!
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hallm
Jan 17, 2003, 9:22 PM
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lynne,
US antitrust laws apply to everyone, even foreign companies, so long as their acts have an anticompetitive effect on the US market. This is called extrateritorial application of US law under the effects doctrine and was recognized by the US Supreme Court in the early 20th century (I think around 1906 or so).
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cedk
Jan 17, 2003, 11:51 PM
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Hallm: Under condition one, when you say acting together, you mean all companys yes? Like a cartell which would effectively have the same powers as a monopoly? But we don't have that really do we? There are plenty of other suppliers out there who are offering similar products cheap. Onesport, EB, Madrock, Bufo, etc.. Everyone's upset at Sportiva but they certainly don't have to buy Sportiva and Sportiva has a right to say how their product will be marketed.
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lynne
Jan 18, 2003, 12:32 AM
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it's not just La Sportiva anymore. It's also now Boreal and Five Ten. The Big Three no doubt (in shoes).
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hallm
Jan 18, 2003, 1:08 AM
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cedk:
Not all companies need to be acting in concert, only two. Further, it could be two or more US resellers getting together to put pressure on the manufacturers to install the policies. That would be sufficient concerted action as well.
Also, a vertical agreement (agreement between manufacturer and reseller) to maintain minimum resale prices into the US is a per se violation of US law.
The real difficulty is finding evidence of the agreement. Only the agreement is illegal, not independent but parallel action.
[ This Message was edited by: hallm on 2003-01-17 17:10 ]
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lynne
Jan 18, 2003, 2:47 AM
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Hallm, what exactly would qualify as "evidence" of the agreement? I strongly suspect that smaller brick and morter retailers would be most willing to speak out about this this illegal practice, however I can almost guarantee you there is nothing in writing..
[ This Message was edited by: lynne on 2003-01-17 18:49 ]
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rprp
Jan 18, 2003, 6:13 PM
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Any hope of talking a small web retailer into getting involved? If they cut prices and then had troubles from the suppliers, then that would be good evidence.
It's more than shoes. Even though different stores have wildly different overheads, the price for almost all gear shows very little variation.
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meataxe
Jan 18, 2003, 6:49 PM
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look at climbing gear at http://www.mec.ca
Then convert to US funds.
Then see how many of those items cannot be shipped outside of Canada.
Because MEC doesn't want to sell to USA? Not likely, but rather because of the manufacturers. But we Canadians deserve it because our average income is lower.
For most items, Europe does get a raw deal. Electronics and computer equipment seems to be up to double US prices.
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