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New cartel laws jeopardise franchises

Planned changes to cartel laws may have the effect of prohibiting franchises from using brand-wide promotions, reports the Australian Financial Review.

HWL Ebsworth partner Richard Westmoreland said such promotions, where goods are sold at a particular maximum price across the chain, could attract criminal prosecution for price fixing under the proposed laws.
“If you’ve got a franchise system, you normally want to be able to run catalogues and ads and things saying ‘hamburger available for $2.50’,” Westmoreland said.

Other law firms agreed with Westmoreland’s assessment of the legislation.

However, a spokesman for Assistant Treasurer Chris Bowen, who announced the laws, dismissed their concerns, and said the draft legislation contained a joint venture defence to protect businesses in a variety of situations.

McDonnell, McPhee & Associates  2008 - 2009

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