Retailers Have the Right to Set Their Own Prices: ACCC Warns Suppliers About Illegal Pricing Conduct
For many retailers and franchise operators, pricing flexibility is critical to staying competitive in a difficult economic environment. Whether it is offering promotions, clearing old stock, matching competitors, or attracting customers during quieter periods, retailers rely on the ability to independently set prices that suit their business model.
The Australian Competition and Consumer Commission (ACCC) has recently reinforced an important legal principle that every franchisor, supplier, franchisee, and retailer should understand: Suppliers cannot unlawfully control the prices retailers charge customers.
The ACCC has warned businesses about illegal resale price maintenance conduct and has taken enforcement action against several suppliers accused of restricting retailers from discounting products.
This article is based on guidance issued by the ACCC Small Business team.
What Is Resale Price Maintenance?
Resale price maintenance occurs when a supplier attempts to control or influence the minimum price a retailer charges for goods or services.
Under Australian competition law, retailers must remain free to independently determine their own selling prices.
A supplier crosses the line when they attempt to:
Force retailers to sell products above a certain minimum price
Prevent retailers from discounting
Threaten supply restrictions for lower pricing
Restrict advertising of discounted prices
Pressure retailers into maintaining recommended retail pricing.
Importantly, there is a major legal distinction between a supplier recommending a retail price and attempting to enforce one.
A supplier is generally allowed to suggest a recommended retail price (RRP). However, they cannot pressure businesses into following it.
Why Illegal Price Controls Harm Competition
The ACCC has made it clear that resale price maintenance damages competition across the market.
When suppliers restrict pricing freedom:
Retailers lose independence
Smaller businesses struggle to compete
Discounting becomes limited
Consumers often pay higher prices.
For franchise systems and retail networks, this issue can become particularly sensitive. Many franchisors want consistent brand positioning and pricing presentation across locations. However, consistency objectives cannot override Australian competition laws.
Attempting to control downstream retail pricing can expose businesses to significant legal and reputational risks.
Retailers Have the Right to Compete
According to the ACCC, retailers are entitled to:
Set prices independently
Offer discounts whenever they choose
Compete freely with other retailers.
This protection is especially important for small businesses operating in highly competitive sectors where price competition directly impacts survival and profitability.
Retailers should understand that suppliers cannot lawfully intimidate them over pricing decisions.
What Suppliers Can and Cannot Do
The ACCC has clarified the boundaries suppliers must operate within.
Suppliers Can:
Suggest recommended retail prices
Provide non-binding pricing guidance.
Suppliers Cannot:
Force minimum selling prices
Pressure retailers not to discount
Threaten to suspend supply
Punish retailers for discounting
Restrict advertising of lower prices.
Even indirect pressure or implied threats may create serious competition law issues.
Recent ACCC Enforcement Action
The ACCC recently took action against several businesses over alleged resale price maintenance conduct.
The matters included:
Connected Audio Visual allegedly requiring retailers to advertise products at recommended retail prices and suspending accounts for non-compliance
Golf Imports allegedly preventing retailers from advertising below certain price levels and threatening suspension
EE Group allegedly warning resellers against discounting certain drone products and suggesting supply could be restricted.
According to the ACCC, each business was required to:
Remove restrictive pricing policies
Notify retailers they could independently set prices
Implement competition law compliance measures.
These cases demonstrate that the ACCC continues to actively monitor supplier conduct across retail and distribution networks.
Why This Matters for Franchisors
Franchisors need to be particularly careful when implementing pricing policies across franchise networks.
While maintaining brand consistency is commercially understandable, franchise agreements, operations manuals, supplier arrangements, and marketing directives must all comply with Australian competition law.
Franchisors should ensure they:
Avoid mandatory minimum resale pricing
Avoid punitive conduct against discounting franchisees
Carefully review pricing communications
Train staff on competition law obligations
Obtain legal advice before implementing network-wide pricing strategies.
Poorly drafted pricing policies can create substantial legal exposure.
What Retailers Should Do If They Feel Pressured
Retailers who believe suppliers are unlawfully controlling pricing should document all communications and seek professional advice promptly.
The ACCC encourages businesses to report suspected anti-competitive conduct.
Understanding your legal rights can help protect your business from unfair commercial pressure and preserve your ability to compete effectively in the market.
Reality Check
Competition law exists to protect both businesses and consumers by ensuring fair market competition.
For retailers and franchisees, pricing independence is a fundamental right under Australian law.
For suppliers and franchisors, aggressive pricing control strategies can quickly create legal risk if they move beyond recommendations and into enforcement or pressure tactics.
Businesses operating franchise or retail distribution systems should regularly review their pricing policies to ensure compliance with competition laws and avoid ACCC scrutiny.
Source credit: This article is based on information published by the Australian Competition and Consumer Commission (ACCC) Small Business team.
Frequently Asked Questions
Can suppliers dictate the prices franchisees or retailers charge?
No. The ACCC has reinforced that suppliers cannot unlawfully control resale prices; retailers have a protected right to set their own prices.
What is resale price maintenance?
It's when a supplier tries to stop a retailer from discounting or setting its own prices, conduct the ACCC has taken enforcement action against.
Why does this matter for franchisors?
Franchise systems that pressure franchisees on pricing risk breaching competition law, even if the pressure is informal.
Speak With a Franchise System Architect
If you are exploring franchising and want to determine whether your business may be ready for franchising, understanding the development process is an important first step.
At Franchising Made Easy®, we help founders design franchise systems that are structurally integrated and capable of sustainable growth.
If you would like to explore how franchising could work for your business, consider speaking with an experienced Franchise System Architect.
