Is this price-fixing or not?

[Derek Sutton]

Originally Posted by fotze

Is that true? I've always felt certain Safeway location in the city had different pricing.

In my Sobeys days there were two different "Price Files", basically a rural one and a city one. All the stores were suppose to go by one of these two pricing lists. Depending on location though some city stores would go by the rural and vcie versa. Like Okotoks would be on city and Lethbridge would be on rural. I know that at Safeway prices did very from store to store as we would do price checks.

[TheGrimm]

Not trying to stir the pot too much, that's why I've omitted names and such. And to be perfectly honest I could be flat out wrong as many here seem to think. Fair enough.


Here is an excerpt from the Competition Act:

45. (1) Every person commits an offence
who, with a competitor of that person with respect
to a product, conspires, agrees or arranges
(a) to fix, maintain, increase or control the
price for the supply of the product;
(b) to allocate sales, territories, customers or
markets for the production or supply of the
product; or
(c) to fix, maintain, control, prevent, lessen
or eliminate the production or supply of the
product.

(2) Every person who commits an offence
under subsection (1) is guilty of an indictable
offence and liable on conviction to imprisonment
for a term not exceeding 14 years or to a
fine not exceeding $25 million, or to both.

I get that a store owner can set a price and say it's final. I just don't get how a region of dealerships owned by different people can get together and do the same thing.


These are the worst offenses as they are pure restrictions to the competition.

[jar_e]

Originally Posted by TheGrimm

Not trying to stir the pot too much, that's why I've omitted names and such. And to be perfectly honest I could be flat out wrong as many here seem to think. Fair enough.


Here is an excerpt from the Competition Act:

45. (1) Every person commits an offence
who, with a competitor of that person with respect
to a product, conspires, agrees or arranges
(a) to fix, maintain, increase or control the
price for the supply of the product;
(b) to allocate sales, territories, customers or
markets for the production or supply of the
product; or
(c) to fix, maintain, control, prevent, lessen
or eliminate the production or supply of the
product.

(2) Every person who commits an offence
under subsection (1) is guilty of an indictable
offence and liable on conviction to imprisonment
for a term not exceeding 14 years or to a
fine not exceeding $25 million, or to both.

I get that a store owner can set a price and say it's final. I just don't get how a region of dealerships owned by different people can get together and do the same thing.


These are the worst offenses as they are pure restrictions to the competition.

The key word in the act is "competitor". Dealerships aren't competitors of each other, at least externally.

[TheGrimm]

Originally Posted by jar_e

The key word in the act is "competitor". Dealerships aren't competitors of each other, at least externally.

Makes sense thanks for pointing that out. I do think I've just come to expect that I'll always get discounts and things thrown in when I buy a car, it's a conditioned behavior though.

[undercoverbrother]

Originally Posted by fotze

Is that true? I've always felt certain Safeway location in the city had different pricing.

Gas in Forestlawn is usually cheaper than in other areas of Calgary

[undercoverbrother]

Originally Posted by jar_e

The key word in the act is "competitor". Dealerships aren't competitors of each other, at least externally.

What makes this tuff, is dealerships will undercut each other (at least I have experienced them doing that).

I think that is where things can get confusing to the public.

[bizaro86]

Originally Posted by jar_e

The key word in the act is "competitor". Dealerships aren't competitors of each other, at least externally.

I don't think that's true, is it, legally? The different Ford (or whatever brand) dealerships are generally separately owned and managed, and compete with each other for business.

[jar_e]

Originally Posted by bizaro86

I don't think that's true, is it, legally? The different Ford (or whatever brand) dealerships are generally separately owned and managed, and compete with each other for business.

A Ford dealership is a Ford dealership that sells Ford cars. Prices being undercut, etc. doesn't allude to price fixing.

Even so, a Ford dealership would be an extension of the Ford manufacturer anyways. They could sell the car for $1 million dollars if they wanted to. There's nothing that says they have to sell a car at a particular price or anything. People get uppity over price fixing and mix up economics and supply/demand with price fixing.

[TheGrimm]

Originally Posted by jar_e

A Ford dealership is a Ford dealership that sells Ford cars. Prices being undercut, etc. doesn't allude to price fixing.

Even so, a Ford dealership would be an extension of the Ford manufacturer anyways. They could sell the car for $1 million dollars if they wanted to. There's nothing that says they have to sell a car at a particular price or anything. People get uppity over price fixing and mix up economics and supply/demand with price fixing.

So two dealerships are competitors when it comes to each other, specifically in a hot market where consumers are hard to come by? Undercutting etc is fair practice. But in a market with low supply and high demand they are able to partner up and consider themselves not to be in competition with each other so that they can maximize profits?

Did I get that right?

[j_j]

Toyota tried something this in Aberta in 2003 or so on all their models. They called it "Access" pricing. Demand was high, as back then they had the market cornered on quality, but it didn't last very long. All the Dealership had to participate. Might have even been a consumer complaint that forced the change.

Bottom line, wait it out, you will save thousands.

[jar_e]

Originally Posted by TheGrimm

So two dealerships are competitors when it comes to each other, specifically in a hot market where consumers are hard to come by? Undercutting etc is fair practice. But in a market with low supply and high demand they are able to partner up and consider themselves not to be in competition with each other so that they can maximize profits?

Did I get that right?

I think you're defining capitalism?

If they are maximizing profits by selling MSRP, that's nothing really shocking. I could understand if they said, Ford-wide, we are now selling the cars for 10k more over MSRP after orders were placed, etc. but even then, its a weak case for price fixing.

[Bobblehead]

Originally Posted by jar_e

A Ford dealership is a Ford dealership that sells Ford cars. Prices being undercut, etc. doesn't allude to price fixing.

Even so, a Ford dealership would be an extension of the Ford manufacturer anyways. They could sell the car for $1 million dollars if they wanted to. There's nothing that says they have to sell a car at a particular price or anything. People get uppity over price fixing and mix up economics and supply/demand with price fixing.

That isn't true - new car dealerships are independent franchisees.

Canada doesn’t have laws against car companies opening up their own stores, Compton says. Tesla and Mercedes Benz have factory stores, he says.

So why haven’t more Canadian car companies switched to Apple Store-style outlets? The companies we contacted either didn’t respond or declined comment.

“In Canada I'm not aware of any efforts to really transform the franchise system,” says George Iny, president of the pro-consumer Automobile Protection Association. “Dealer franchising goes back to the Henry Ford era. It was a means for the car maker to expand their retail sales network and provide service with a local person's capital and initiative.”

http://www.theglobeandmail.com/globe...ticle16935030/

[DoubleF]

Originally Posted by bizaro86

I don't think that's true, is it, legally? The different Ford (or whatever brand) dealerships are generally separately owned and managed, and compete with each other for business.

Isn't your argument like saying McDonalds franchises are competitors? The main difference for dealerships is that they don't share a name.

[undercoverbrother]

Originally Posted by DoubleF

Isn't your argument like saying McDonalds franchises are competitors? The main difference for dealerships is that they don't share a name.

Wow, you can't compare the two.



Let me know how it goes next time you order you Big Mac Combo, and you try to offer list less 5%?



I seem to recall that dealerships, really make their money on the servicing of vehicles, but I could be wrong.

[TheGrimm]

Originally Posted by jar_e

I think you're defining capitalism?

If they are maximizing profits by selling MSRP, that's nothing really shocking. I could understand if they said, Ford-wide, we are now selling the cars for 10k more over MSRP after orders were placed, etc. but even then, its a weak case for price fixing.

No, I'm just extrapolating both arguments from what you've said. You yourself said dealers undercutting each other is fine. This is standard practice, they are independently owned and as such they are able to set their own prices. I agree with this.

But then you said that they are not competitors when it comes to setting a "minimum price" which is the part I am disagreeing with. How can they be considered competitors when it comes to a buyers market, but as soon as the tide tips in their favor they are able to state that they aren't in competition with each other so the laws don't apply?

So which is it?

[Derek Sutton]

Originally Posted by undercoverbrother

Wow, you can't compare the two.



Let me know how it goes next time you order you Big Mac Combo, and you try to offer list less 5%?



I seem to recall that dealerships, really make their money on the servicing of vehicles, but I could be wrong.

And loan insurance and extended warranty and maintenence obligations of the extended warranty

[ken0042]

Originally Posted by TheGrimm

I get that a store owner can set a price and say it's final. I just don't get how a region of dealerships owned by different people can get together and do the same thing.

I think an analogy that we are all better familiar with is Apple products. Take something like an iPad- everybody sells it for the same price. That is because Apple makes it a condition of being an Apple reseller that there is only one price you can charge. Occasionally you will see that iPad on sale; and you will also see that other stores are running some similar kind of sale. It isn't Best Buy that is fixing the price with Target; it is Apple telling it's resellers what price they can charge.

[Derek Sutton]

Originally Posted by undercoverbrother

Wow, you can't compare the two.



Let me know how it goes next time you order you Big Mac Combo, and you try to offer list less 5%?



I seem to recall that dealerships, really make their money on the servicing of vehicles, but I could be wrong.

Well it is about half the same, just two different types of competition. The same company selling the exact same thing at the exact same price everywhere (McDonalds vs McDonalds, Ford vs Ford ((as an example here))
And two similar companies selling similar items at similar prices (Big Mac vs Whopper, Mustang vs Camaro).

[Young-Sneezy]

scanned this whole thread to find out the type of car.

left disappointed.

[Bobblehead]

The idea of "Resale Price Maintenance" was redefined in 2009 and shifted from a criminal to a civil offense.

But even then, as stated, as long as there is competition then there isn't really any offense.

You can buy a car/tablet/watch/whatever from someone else. There is no right that you should be able to get that specific model at a specific price.

And if it is a brand new, low supply model, I can't imagine getting a deal on it.

I think the issue here all arises from a salesman saying there is an agreement to not cut the price. I doubt a salesman would have that sort insider knowledge. It sounds to me like he is trying to prevent you from asking and potentially buying from someone else - he wants the sale.