Anti-competitive behaviour by Miele? "Miele won't let us discount"

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ang1170

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I'd like to get some opinions on this (hopefully informed ones!):

At the moment, I'm looking to purchase some kitchen appliances (ovens, diswasher, washing machine etc.) and would like to get mostly Miele items.

The poblem is that there doesn't seem to be any possibility of getting any sort of discount (they add up to over €10k) from anyone. Now, nobody has a right to a discount. However, in talking to various retailers, I've been told a few times "Miele won't let us discount".

This seems to me that Miele are setting a retail selling price in the market, and somehow enforcing it (by some form of agreement? pressure?).

My question is whether this is legal or not, according to the 2002 Competition Act?

Second question: is it worth asking the Competition Authority?

Any opinions?
 
No, you would be wasting your time and embarrassing yourself in the process. Miele manufacture a quality product and they feel that the higher price one pays is justified. Ask anyone who has a Miele product and they will tell you -- pure hassle free appliances. Now in saying that it really is up to the consumer if they wish to pay more now and save on trouble or buy other products and pay for repairs and time wasting breakdowns.

Saying that there must be some retailer who will price a packae for 10k.
 
Have a vague recollection of seeing an ad in a newspaper recently about discount on Miele product but can't for the life of me remember the exact details. I think it was run by Miele themselves and I recall saying to myself that this was most unusual because I had read on AAM that they don't do discounts.

Might be worth your while to give them a ring and check it out with them in case there is anything on offer.
 
mercman said:
No, you would be wasting your time and embarrassing yourself in the process. Miele manufacture a quality product and they feel that the higher price one pays is justified. Ask anyone who has a Miele product and they will tell you -- pure hassle free appliances. Now in saying that it really is up to the consumer if they wish to pay more now and save on trouble or buy other products and pay for repairs and time wasting breakdowns..
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You're missing the point, which has nothing to do with the products themselves: I'm completely sold on Miele products. It's to do with where to buy them and how much to pay for them.

The point is that (with certain exceptions) agreements that attempt to fix selling prices are illegal. An obvious example of this would be a collection of retailers coming together and agreeing not to discount: there are I believe investigations underway at the moment into car dealers doing this.

My question is whether this is whether an agreement between a manufacturer and/or distributor and retailers falls into the same category?

It's a consumer/competition legal question: nothing to do with the merits or otherwise of the products themselves.

mercman said:
Saying that there must be some retailer who will price a package for 10k.
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No, there isn't (unless someone can point me towards one). Hence the suspicion of anti-competitive behaviour.
 
sueellen said:
Have a vague recollection of seeing an ad in a newspaper recently about discount on Miele product but can't for the life of me remember the exact details. I think it was run by Miele themselves and I recall saying to myself that this was most unusual because I had read on AAM that they don't do discounts.
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If anything, this just confirms the suspicion that the manufacturer has absolute control over the retail price of their goods. These promotions are indeed run by Miele, who set the scope and level of the discounts for the promotion.
 
Surely they have the right to set their prices as they see fit. If you as a buyer, do not think it is worth it, then don't buy their product but purchase a substitute.

If enough people are of this opinion and follw this option, they will have to reduce their prices or go out of business.

If you are alone in your opinion, then perhaps you need to revise your buying price up to their selling price.

It is only anti-competitive if they collude with other producers of similar goods to ensure higher prices across the market as a whole.
 
Check with the National Consumer Agency and the Competition Authority.

If you have grounds for complaint, then you should complain even if the Competition Authority do nothing.

You can also contact Paul Cullen, the consumer correspondent of The Irish Times who might be interested in it.

Brendan
 
It's an interesting one. You could try to get hard evidence of the manufacturer's policy. Try and get the supplier to mention this in an email, or in a recorded conversation with a senior staff member (most mobile phones have a voice recorder now).

Then get in touch with The Competition Authority and see what they say. Mercman is indeed missing the point. It's not a question of the quality or otherwise of the product. If the manufacturer has a policy of preventing discounting, this may well be anti-competitive.

jpd said:
It is only anti-competitive if they collude with other producers of similar goods to ensure higher prices across the market as a whole.
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Not true. If they collude with their distributors to set prices, this is in breach of legislation. Check out details of the Competition Authority case against the Irish Times about setting the retail price of the newspaper - see http://www.irlgov.ie/compauth/pressre.htm
 
I was purchasing a dishwasher recently and had a look at the Miele product. The special offer that was available was a €200 trade in allowance. However this only brought the dishwasher price down to about €700 which was still the top price. I had previously had a Siemens dishwasher that lasted 15 years. I ended up with a Bosch in the end for €570 semi integrated.
 
The 'Miele won't let us discount' policy has been around for at least three years, as I encountered the same thing when buying most appliances through DID. Definitely worth persuing with the relevant bodies - even if it's probably just a waste of your time.... :rolleyes:
 
I am unable to see how the 'Miele won't let us discount' is anti-competitive. They manufacture a quality product and they do not want their products classed in the same category as the other products of a lessor quality. I would say the only people suffering from their 'non competitiveness' is Miele themselves. Ask anyone who uses their products.

Those who are ranting are becuase they can't get a discount.

MODS - maybe this should be moved to 'Letting off Steam', rather than making this a serious thread.
 
I would have thought that Miele gets paid X by the retailer and then the retailer charges X plus handling/profit to the customer. Surely there is room for a discount on the retail side. If I was spending 10k I'd haggle like crazy. I assume you talked to the top manager at these stores?
 
mercman said:
I am unable to see how the 'Miele won't let us discount' is anti-competitive. They manufacture a quality product and they do not want their products classed in the same category as the other products of a lessor quality. I would say the only people suffering from their 'non competitiveness' is Miele themselves. Ask anyone who uses their products.

Those who are ranting are becuase they can't get a discount.
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You're still missing the point. Miele are indeed entitled to sell their product at any price they chose. What they are not entitled to do is to set the price at which their distributor (a seperate legal entity) sells the product. To attempt to control the business operations of their distributor in this way is indeed anti-competitive.

Check out the Irish Times case that I linked to above.
 
OK so. Let's assume you are correct. I really am unable to see any of their retail agents wishing to sell their products at a loss -- can you ??

Why aren't BMWs or Mercedes priced at the same level as TOYOTA or MITSUBISHI. After all they are just cars with four wheels, an engine and seats etc. The same product with a different badge.
 
We bought a load of applicances about a year ago and decided to include a Miele washing machine (from my research felt Miele were the market leaders in washing machines (they also offered 7 years parts and labour and believe this washing is earning its keep in our house!) but wasn't convinced they were the best in other products. For example heard/read several times that Bosch make very good dishwashers - so not convinced that one manufacturer can excel at all kitchen applicances but that is only my humble opinion and I know that's not what the OP is asking.)

Anyway, when I was paying for the lot the Manager didn't discount the Miele washing machine as he said that he made Euro40 on it (it cost about Euro1100) and I got the impression that the margins were so small that he couldn't discount it not that Miele would not allow him so maybe thats the reason.
 
mercman said:
OK so. Let's assume you are correct.
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Well, you can make the assumption, or you can go read Section 4(1) of the Competition Act, 1991, whichever you like.

mercman said:
I really am unable to see any of their retail agents wishing to sell their products at a loss -- can you ??
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Who mentioned selling at a loss? The question is whether Miele have the right to prevent retailers selling at a reduced margin? Let's say there is an online retailer out there who doesn't have the staff and premises costs of a traditional retailer - are you suggesting that Miele have to right to prevent him passing on these reduced costs to the customer?

Or let's say there is a retailer who sets up a premises in a cheap, industrial estate instead of a high-street location. Do they have the right to charge a reduced price?

mercman said:
Why aren't BMWs or Mercedes priced at the same level as TOYOTA or MITSUBISHI. After all they are just cars with four wheels, an engine and seats etc. The same product with a different badge.
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This is nothing to do with this case. If you wanted a motoring comparison, the question would be whether the Mercedes importer has the right ensure that both Ballsbridge Motors and Brady's in Castleknock sell the same car at the same price.
 
mercman said:
Why aren't BMWs or Mercedes priced at the same level as TOYOTA or MITSUBISHI. After all they are just cars with four wheels, an engine and seats etc. The same product with a different badge.
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Can we keep this thread on-topic please, which is nothing to do with the quality of Miele appliances, whether they're value for money, or better or worse than other competitive products?

The topic is whether Miele are engaged in anti-competitive practices by fixing the retail price if their goods in the market, and thus preventing their distribution network from competing with eachother. The problem is lack of competition between Miele retailers, not between Miele and Bosch (or anyone else): the general appliance market is extremely competitive.
 
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