NSW: Record companies threaten retailers over cheap CD imports

AAP General News (Australia)
04-02-2001
NSW: Record companies threaten retailers over cheap CD imports

SYDNEY, April 2 AAP - Australia's biggest record companies warned retailers not to
import cheap CDs from overseas or risk being cut off from their local supplier, the Federal
Court has been told.

The Australian Competition and Consumer Commission (ACCC) said the case dated back
to July 1998 when the federal government made it legal for retailers to import cheap CDs
without permission from the major companies, in a practise known as parallel importing.

Counsel for the ACCC, Julian Burnside, QC, told the court Warner and Universal, formerly
Polygram, either implicitly or directly warned retailers they would be cut off from their
Australian supply if they imported the cheaper CDs from South East Asia.

That would leave the retailer without the full catalogue of top charting releases,
Mr Burnside said.

"You make it difficult to get products out of Indonesia and you make it dangerous to
sell it in Australia," he said.

"By the combination of these two things you minimise the risk that there will be inexpensive
legitimate parallel imports sold in the Australian market in competition with local product."

The major companies also reduced supplies to Indonesian wholesalers so there would
be less product available to sell to Australia, Mr Burnside said.

The court was told that retailers could buy a CD from Indonesia at the cut price of
$7.50, including shipping costs.

Sony settled its case with the ACCC before court began this morning.

AAP dmc/jjs/cd/bwl

KEYWORD: ACCC

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