resale price maintenance

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resale price maintenance (rpm)

a business practice whereby a supplier stipulates the PRICE at which his product is to be sold by retailers. By establishing a uniform retail price (that is, by preventing price cutting) the supplier may aim to ensure that his product is available through most retail outlets, as well as preserving the price-quality image of the product. On the other hand, in the absence of rpm, price competition between retailers may well increase the sales of the product. Rpm is virtually prohibited by UK COMPETITION POLICY on the grounds that it deprives consumers of the benefit of lower prices and gives too much protection to inefficient retailers. See OFFICE OF FAIR TRADING, RECOMMENDED RESALE PRICE, RESALE PRICES ACTS (1964,1976).

resale price maintenance (RPM)

a type of ANTICOMPETITIVE PRACTICE/RESTRICTIVE TRADE PRACTICE whereby a supplier prescribes the PRICE at which all retailers are to sell the product to final buyers. The main objection to RPM centres on the fact that it restricts or eliminates retail price competition, and by prescribing uniform retail margins it serves to cushion inefficient retailers.

The practice of RPM (except in very special circumstances) was made illegal in the UK in 1964, and this led to the rapid expansion of mass retailers such as supermarket chains who could afford to cut prices by BULK-BUYING. See also COMPETITION POLICY (UK), OFFICE OF FAIR TRADING, RECOMMENDED RETAIL PRICE, RESALE PRICES ACTS 1964,1976.

References in periodicals archive ?
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Jung-gu's bid aims to raise the sales of products from developing countries through fair trade to help them overcome poverty.
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The artisans who produce Fair Trade products earn fair wages & community development funds.
Over the past three years, staff and students at the school have worked hard to embed fair trade principles into school life and raise awareness of fair trade amongst students and the wider school community.
Search on www.bafts.org.uk Commit to buying an |extra fair trade product this month.
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Keywords: free trade; fair trade; poverty; international politics