Fender, Yamaha, Roland, Thomann in price fixing case

[Lynxtrap]

German authorities have fined Fender, Yamaha, Roland, Thomann and MusicStore 21 million euros for price fixing.

There was a similar case in UK last year, they probably uncovered this one in the process.

Do you think this is going on with the big retailers in the US too?

(link removed)

 

[Jowes_84]

Wow. Didn’t even know. Likely, but maybe they’re smarter?

 

[SuprHtr]

It never occurred to me that bundling was a work-around for minimum price restrictions. Makes sense.

 

[Peegoo]

Gibson and Fender have been doing a 'legal' version of this with their dealers for more than a few years.

 

[nojazzhere]

German authorities have fined Fender, Yamaha, Roland, Thomann and MusicStore 21 million euros for price fixing.

There was a similar case in UK last year, they probably uncovered this one in the process.

Do you think this is going on with the big retailers in the US too?

(link removed)

All I know is.....I'm claiming the name "Bundeskartellamt" as my next band name. Just rolls off the tongue, no? Much better than @FenderGyrl's idea of "Human Burrito"......

 

[Reedo]

Fender got flamed a few years ago in the UK. It doesn't surprise me that this is happening again. Big companies driven by greed again, what a shocker. I see Thomann got rapped too.

 

[Lynxtrap]

Gibson and Fender have been doing a 'legal' version of this with their dealers for more than a few years.

I don't know much about the business side, but I don't really understand why the manufacturers want to inflate retail prices.
I guess I can see how it would enable smaller dealers to compete with giants such as Thomann. Dealers have pretty much had to set their prices at Thomann levels for the last 10-15 years.

 

[Jowes_84]

All I know is.....I'm claiming the name "Bundeskartellamt" as my next band name. Just rolls off the tongue, no? Much better than @FenderGyrl's idea of "Human Burrito"......

If you need more band name suggestions like that - more than happy to provide. It is a nice word indeed - but there are more.
Cheers

 

[Hpilotman]

German authorities have fined Fender, Yamaha, Roland, Thomann and MusicStore 21 million euros for price fixing.

There was a similar case in UK last year, they probably uncovered this one in the process.

Do you think this is going on with the big retailers in the US too?

(link removed)

Greed is a common business language spoken around the world.

 

[Controller]

If you need more band name suggestions like that - more than happy to provide. It is a nice word indeed - but there are more.
Cheers

How about Buster and the Antitrusters?

 

[Lynxtrap]

Greed is a common business language spoke around the world.

No doubt, but what I don't fully get is how the price fixing benefits the manufacturer in this case. Let's say Thomann pays Fender 600 Euros for a Tele. Why does Fender really care if Thomann sells it for 1000 or 1200 Euros, when they still get their 600?

I can see how a small dealer might have to pay Fender 800 for the same Tele in a much smaller batch, and really wants a retail price of 1200. But somehow I doubt that this is Fender's (or the other manufacturers) concern here.

 

[claes]

No doubt, but what I don't fully get is how the price fixing benefits the manufacturer in this case. Let's say Thomann pays Fender 600 Euros for a Tele. Why does Fender really care if Thomann sells it for 1000 or 1200 Euros, when they still get their 600?

I can see how a small dealer might have to pay Fender 800 for the same Tele in a much smaller batch, and really wants a retail price of 1200. But somehow I doubt that this is Fender's (or the other manufacturers) concern here.

Well if you had read the link provided you would have known that fender and yamaha has pressured Thomann several times to raise there prices, Thomanns crime was to comply

Thomann (and Anderton) is one of only five shops worldwide with special status among fender. That means they get FSR that no one else gets.
I.m sure they don't want to that status...

 

[Greggorios]

I'm shocked. Good move by the Germans. For the most part, good, honest competition is a thing of the past.

 

[Lynxtrap]

Well if you had read the link provided you would have known that fender and yamaha has pressured Thomann several times to raise there prices, Thomanns crime was to comply

I provided the link and I did read it before I posted it.
That doesn't answer the question why Fender and Yamaha has pressured Thomann to raise retail prices. Not wholesale prices, retail prices.
Crimes usually have a motive, and that's what I'm curious about, on the part of Fender, Yamaha and Roland.

 

[dented]

I didn't know. I thought they had been doing this for years already.

 

[Dan German]

How about Buster and the Antitrusters?

You can only buy tickets to the show with Monopoly money.

 

[Blrfl]

No doubt, but what I don't fully get is how the price fixing benefits the manufacturer in this case. Let's say Thomann pays Fender 600 Euros for a Tele. Why does Fender really care if Thomann sells it for 1000 or 1200 Euros, when they still get their 600?

In a nutshell, minimum sale price protects Fender from its bigger dealers.

Say there's a product Fender wants sold for at least $1,000. Customers looking to buy one will see at least that price everywhere, which puts Bob's Corner Guitar Emporium on the same footing with the Sweetwaters and Thomanns. Bob's might get the product at $900 and price it at $1,000 where the big dealers get it at $800 and price it the same way. Bob's makes less per sale, but they're still getting sales because they can attract the people who want to support a local shop and some whose only requirement is that it be at the lowest-possible price.

Here's the rub: If you take the minimum sale price out of the picture, the bigger dealers are free to sell the same product at $900. Bob's can't compete because they'd make nothing on it at that price. Once the product line as a whole becomes unprofitable, Bob's will either not renew their dealer agreement or go belly-up and Fender loses a sales channel. As more small dealers drop out of the network, a larger percentage of Fender's revenue comes from a smaller number of large dealers. Those large dealers end up with Walmart-like leverage over product and pricing that will make things financially-unpleasant for Fender.

 

[GGardner]

"The manufacturers asked at least the leading specialist retailers Thomann and Music Store not to undercut fixed minimum sales prices, which they did in many cases."

I wonder if it's like when a Musician's Friend advertisement says that a certain brand is excluded from the 20% discount, but then the guy on the phone says he'll take 20% off anyway. Man, I love that guy.

 

[SnidelyWhiplash]

Typical idiocy from European courts. Anytime one wants to make a " profit ", it shall not be tolerated.

 

[Electric Warrior]

I liked the portion of the article describing how it's a pretty lousy scheme in the first place.

"However, there was no or only sporadic enforcement or monitoring of the minimum sales prices requested for some products. The retailers often did not comply with the requirements either by not implementing them or avoiding them, e.g. by bundling several products in an overall price. At the same time in complaints addressed to Yamaha, Roland and Fender the retailers Thomann and Music Store demanded that other specialist musical instrument retailers observe the minimum prices. This was partly in reaction to complaints that their own prices were too low."