Australian customer claim VAT for Alexa bought from Mulberry website?

[claypot]

In case anyone's interested, I did send off an email to the UK OFT, but apart from an auto-generated receipt have not heard anything back - not sure that they would even respond personnally - they might just look into queries and make their own determinations without issuing personal replies to people raising potential issues. I'm still not fully clear on whether the removal of VAT for people outside the EU is a definite legal requirement - I've since asked another smaller online retailer (non-M-related) if they do this and they said that unfortunately they're not able to - not sure if they too just 'zero' it as M does, while charging the same price...probably. Best to avoid (I hate paying any more than I have to for anything!).

Hey Lois, did you ever hear back from the OFT?

 

[Lois_Lane]

Hi claypot,

I did hear back, but it was such a 'non-response' that I was too annoyed to post! But since you asked, this is what the OFT had to say...

Thank you for your e-mail of 11 January in relation to your concerns about the conduct of Mulberry.

By way of background, the mission of the Office of Fair Trading (OFT) is to make markets work well for consumers. We achieve this by promoting and protecting consumer interests throughout the UK, while ensuring that businesses are fair and competitive. Our primary duties involve the enforcement of competition law, and the application of consumer protection legislation in respect of matters that adversely affect the collective interests of UK consumers.

The main law covering competition in the UK is the Competition Act 1998 (the Act). In brief, the Act contains two main prohibitions. The Chapter I prohibition prohibits price fixing or other anti-competitive agreements which prevent, restrict or distort competition. The Chapter II prohibition prohibits conduct which amounts to an abuse of a dominant position.

In general, the price that a business sets for a particular product or service is a matter for its own commercial judgement. The OFT does not have a role as long as prices are not arrived at by agreement, or do not reflect an abuse of a dominant position or anti-competitive practices in the UK.

In assessing Mulberry’s conduct, a key issue is whether the company holds a dominant position on a relevant market. A company is considered dominant if it can operate to an appreciable extent independently of its competitors and customers. In assessing this we consider whether there are any constraints on the company’s behaviour such as the strength of existing competitors in the market.

Given the existence of other major competitors, it does not appear that Mulberry would be considered dominant in the sale of handbags overall. Additionally, we would also need more in terms of evidence to suggest that prices were contrary to prevailing market conditions. In view of this, we will not be taking any action in relation to your complaint at this time.

We appreciate the time you have taken in bringing this matter to our attention. The OFT is keen to ensure that markets work well for consumers and the complaints we receive are used to help assess and shape the work of the OFT in the future. In this context, we will retain your concerns on this issue on our database and take them into account when considering areas for future investigation or study.

Yours sincerely
Enquiries and Reporting Centre

FYI, this was my query:

My concern relates to the fact that Mulberry charges the same price for items sold to purchasers within or outside of the EU. For customers within the EU, the price of each item includes VAT of 20%, as required. However Mulberry does not reduce the EU price by the amount of VAT for purchasers outside the EU that they sell to directly from their website - they 'zero-rate' the VAT (so technically don't charge it) but still charge the same final figure as for within-EU purchases (which include the VAT). Therefore they are essentially penalising purchasers outside the EU by charging 20% more than they should have to pay under UK legislation (noting that delivery is an accepted separate charge). In comparison, other online retailers based in the UK (selling the same Mulberry bags in addition to other consumer items) do deduct the VAT for purchasers located outside the EU. From these other retailers (such as net-a-porter), the purchase price is [UK price] - [VAT 20%] - these retailers are treating the VAT correctly. Mulberry.com's selling practice, on the other hand, which I believe should be same as the other retailers', involves instead just the [UK price] as the non-EU price, so Mulberry is essentially discriminating against, or charging a penalty to, overseas buyers, and pocketing the 'extra' 20% that woulld otherwise be the VAT portion of the price if the purchaser was located in the UK. I would like you to look into whether this is an acceptable practice legally or not.

So yes, a reply was received, but not exactly answering the question asked. But I think it's safe to assume M can just go on doing what they want to re the VAT charge, so not buying from them is my only small avenue of protest available.

 

[bclovesbags]

I'm boycotting them too Lois!
I've also discovered that the Anya Hindmarch site doesn't take the VAT off either.
I have bought from my wardrobe who do take the VAT off but I noticed this morning that they are no longer paying the Australian duty (DDP) but now sending delivery duty unpaid (DDU).

 

[Lois_Lane]

Good job, bc! It seems silly to pay 20% more for the same item, and it really peeves me that M feels perfectly justified taking that 20% as extra profit - I'm sure they're doing just nicely without having to take extra 'cream' from their international customers. I know when they did their customer survey a while ago quite a few people raised this as a negative, but obviously they've either not got round to processing the results yet, or have chosen to ignore this feedback.

I haven't bought from MW so I wasn't aware that they'd changed their duty procedure - it's slightly annoying/inconvenient, but should end up costing the same either way? NAP still do DDP, I think, if you're wanting an alternative option.

 

[bclovesbags]

I love NAP but MW are very good and offer a frequent buyers type club (after my first purchase I got a 50 pound off next purchase offer). Sometimes their range of Mulberry is better too. I have an Edie on the way!!!!
Yes you are right about the DDP/DUP and there is always a chance that it will get through without duty because it is just on the $1000 border.