In late 2015, Pandora Australia president Brien Winther emailed the brand’s local retail stockists warning them that they were not permitted to distribute jewellery from the high-profile Alex and Ani on the basis that it was a competing product.
The move raised concerns that Pandora was in breach of the Consumer and Competition Act 2010 – particularly with regards to misuse of market power and exclusive dealing – and several retailers consequently referred the matter to the ACCC.
However, less than two months after Jeweller received confirmation that an investigation had been initiated the consumer watchdog advised a number of industry members that it would no longer pursue the matter.
The ACCC issued a letter to Nationwide Jewellers – Australia and New Zealand’s largest buying group – in response to several member complaints.
The ACCC’s advice read, in part: “On the basis of the information currently before us, we consider that the alleged anti-competitive conduct regarding the restrictions imposed by Pandora on retailers is unlikely to have the purpose or effect of substantially lessening competition.”
Nationwide managing director Colin Pocklington said the ACCC had directed one member to use the Australian Small Business Commissioner’s dispute resolution services to address their complaint.
He added that the New Zealand Commerce Commission had reached a similar conclusion to its Australian counterpart: that Pandora Australia’s action would not prevent Alex and Ani from entering the market or lessen competition.
“Quite a few members who stock Pandora are disappointed with the outcome, as they had hoped that intervention by the ACCC would allow them to sell both Pandora and Alex and Ani products,” Pocklington commented.
“I think [the ACCC] have overlooked the issue of misuse of market power but existing Pandora stockists will now have to decide whether to stay with Pandora or jump ship to [Alex and Ani]. Two of our members that I am aware of are now evaluating if they should keep Pandora based on return versus the stock investment.”
Retailers ‘trapped’
Karin Adcock, CEO of local Alex and Ani supplier House of Brands, said she was “baffled” that the ACCC was not taking further action against Pandora given the trade restrictions it had placed on retail stockists.
“I have been contacted by many of these stores with real anger directed toward Pandora for forcing them to lose out on a new brand that can add value to their business and offer customers a choice of product,” she said.
Adcock explained that stores felt “trapped” because while they were dependent on Pandora, they could also no longer make their own choices as to which brands they would stock.
“They don’t know how long they will have Pandora and at the same time they can’t start building up another brand. This resentment towards the brand is shaking up the industry and potentially harming a company I started in Australia, all of which is very sad,” she said.
“We still expect that the ACCC will review the situation as they begin to appreciate the full ramifications of Pandora’s steps to try to block the entry of Alex and Ani to the Australian market.”
Adcock added: “I am very disappointed and indeed puzzled that Pandora have forced their retailers to block Alex and Ani from being allowed to join other brands being sold. Their view that Alex and Ani is a competing product does not stack up as the offering is entirely different.”
Jeweller contacted Winther for comment but he stated that he had nothing further to add.
The ACCC declined to comment.
Shared history
Adcock introduced Pandora to the Australian market in 2004, and since then, the company has expanded to include more than 100 concept stores across Australia and New Zealand.
Although she left the company in 2012, Adcock was credited with much of the brand’s success in the local market as well as overseas – international markets were said to have emulated the business model Adcock used in Australia.
In December 2015, Adcock announced she had secured the local distribution rights to Alex and Ani – another jewellery brand experiencing meteoric success.
US-based Alex and Ani was founded in 2004 and currently has 1,800 stockists in its home country as well as more than 800 outlets in international territories, including the UK, Spain, Japan, Canada and Mexico.
More reading
ACCC begins Pandora jewellery investigation
Battle of the jewellery brands
Brand battle: Pandora, Alex and Ani to fight it out
Pandora jewellery in hot water over Alex and Ani
Adcock launches Alex and Ani in Australia