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Summary
- HP proposes RPM for new market conditions.
- Several aspects such as pricing, competition, and market conditions involved.
- Commerce Commission to analyse all factors before giving out decision.
The Commerce Commission has recently laid out various pros and cons for HP New Zealand. This is in regard to the recent application that New Zealand had made towards the commission. With regards to the engagement of the HP online stores as well as well as the various prospects it might entail, the company had proposed the idea of resale price maintenance.
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What really is RPM?
The Commerce commission in return to this stated that that would be considered an unlawful action as per the Commerce act. It was further explained by the commission that RPM Resale Price Maintenance occurs when a particular minimal selling price is set by the supplier. This is the reason individual price setting by the companies is prohibited in order to maintain fair and affordable prices for the customers.
It was further added that an RPM was allowed in a case where it stood to be beneficial to the customers. Amongst the several points to consider before giving the green signal for RPM is whether or not the quality and the process of production are affected, and also whether it would help in production or prove a hindrance, besides the basic price increase point that needs to be considered.
In its proposal, the technology giant HP stated that that would not only not prove to be a hindrance in the lawful course of action of things, but would also cause mild benefits to the customers, and hence the commission should allow the same.
In the anticipation of few supply chain reactions and of the belief that the distributors as well as sellers shall not get particularly affected due to the same, HP proposes that this anticipation be granted. The company was further of the view that even if there could be any kind of impact on the competition, it should help in making it beneficial for the customers.
Even though the final decision on the matter is expected on 10th of September, 2021, the commission has revealed that it should release a draft of the determination prior to that.
Recently, HP New Zealand had announced a revenue of NZ$400M for the year ended October 2020, while the Net profit was NZ46.8M.
