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EXCLUSIVE: Yamaha Dumps Dealer After He Opens Store Next To Harvey Norman ACCC Called In

By David Richards & Peter Familari | Tuesday | 18/02/2014

The Australian Competition & Consumer Commission has been called in after a Melbourne based specialist Hi Fi dealer was suddenly dumped by Yamaha two weeks after he opened a new store right opposite a Harvey Norman store which also sells Yamaha Hi Fi gear.

Melbourne based specialist dealer Rio Sound & Vision, a Yamaha Hi Fi equipment stockist for more than 10 years says it is a victim of the Japanese Hi Fi Company accusing it of "bowing to the demands" of giant retailer, Harvey Norman.

The directors of Rio Sound & Vision have also asked the ACCC to investigate Yamaha for engaging in "price maintenance" relating to the pricing of Yamaha top-of-the range Aventage components.

Paul Riachi a director at Rio Sound & Vision said that his Company was the largest Yamaha specialist dealer in Australia turning over in excess of $1M of the brand's audio-video products. He said that "suddenly and out of the blue Yamaha dumped us, at the time we were negotiating the purchase of 400 products from Yamaha".

Riachi says while he" has no evidence"  he suspects Harvey Norman executives at the Preston based Harvey Norman store complained to Yamaha because he was heavily promoting its products.

When it was put to Riachi that he had a reputation for discounting he said "Our complaints to the ACCC relate to two issues, price maintenance and the way in which we were dumped. Yamaha have approached us on several occasions over the price we were selling their Aventage component products for, they were not happy that we were selling below the recommended retail price" he said.  

Simon Goldsworthy the General Manager of Consumer at Yamaha said ''Yamaha exercised its right to terminate its 'without cause' clause. The clause allows either side the same right to terminate as long as 30 days' notice is given.''

Industry insiders claim Yamaha has a history of terminating dealers without cause after conducting its annual review. They also point out Rio hasn't had access to Yamaha's flagship Aventage range since October 2011.

The same insiders also say that following the move to its new premises, Rio has been busy trying to get suppliers to sign on to one of its silver, gold or platinum promotional packages. Yamaha declined to pay a rumoured $20,000 for one of the packages which would have seen its brand flown outside the store on a flagpole amongst other hopeful promotional advantages.

An industry veteran who did not want to be named said whatever the truth of the dispute Rio, in his opinion had an interesting perspective about its own business.

This time last year, Yamaha had a major falling out with JB Hi Fi resulting in the retailer stripping Yamaha from all their stores. Terry Smart the CEO of JB Hi Fi claimed at the time that Yamaha management "reneged" on a deal to supply the retailer with Yamaha musical instruments.

A former Yamaha manager told ChannelNews "After the JB Hi Fi loss Harvey Norman became a key retailer for Yamaha, without Harvey Norman Yamaha would struggle in Australia and I suspect that pressure would have been put on them to fix the Rio problem". 

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