ACCC investigates Harvey Norman's business

ACCC investigates Harvey Norman's business

The Australian Competition and Consumer Commission (ACCC) is investigating Harvey Norman's business practices, ARN has learnt.

The investigation relates at least in part to a story by ARN reporter Gerard Norsa headed "Deal direct and you're out" in which then HN general manger Tony Gattari was quoted as saying "Let us go into this battle with unity" (ARN April 7, page 1).

The article highlighted HN's concern about vendors entering the retail turf and reported it was asking all retailers to take a stand against any manufacturers incorporating a direct-selling component into distribution channels.

In August, ARN subsequently broke the news that the retail giant had dumped Compaq as a supplier after it was revealed that the vendor was to establish its own retail outlets. And in September, it was reported that about 20 representatives of Australia's IT mass retailers met at Harvey Norman's head office to discuss ways of promoting the general interests of the IT retail channel.

ACCC investigator Mark Bastic contacted ARN on Tuesday last week and referred to an investigation and the article, saying it was "pursuing the matter". It is understood the ACCC's interest relates to anti-competitive business practices.

Harvey Norman's current general manager of computers and communications, John Slack-Smith, subsequently contacted ARN requesting a copy of the issue. When ARN tried to contact him on Thursday, Slack-Snith was unavailable, but in response to questions about the investigation, director John Skippen said: "The ACCC is always looking into retailers and all of our franchises at various times, so there is nothing to report."

But when ARN asked for Harvey Norman's reaction to the investigation of its comments in the April 7 report, Skippen insisted: "At this point in time, there's no reaction because we haven't been contacted by the ACCC."

The original story in question included part of a memo which Gattari said was to be sent to all HN subsidiaries read in part: "The continuing financial security of the holding company and its franchise operators is a promise we make to all our proprietors. Attempts by manufacturers to sell direct to our customers jeopardises our business.

"We do not, cannot and will not support those companies who wish to become competitors to Harvey Norman. "Trading [with them] will cease if this occurs. It is that simple. Head office will advise you of those occurrences."

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