aggregated rebate

(redirected from overriding discount)

aggregated rebate

or

overriding discount

a business practice whereby a supplier offers distributors/retailers a discount on their total purchases over a specified time period (usually one year) rather than on individual orders. The operation of aggregated rebates, by encouraging dealers/retailers to place the whole or a substantial part of their regular orders with one supplier, may help the supplier increase his sales and protect market share. However, if undertaken by a DOMINANT FIRM, the practice may serve to limit competition in a market by depriving rival suppliers of distribution outlets. See COMPETITION ACT, 1980, QUANTITY DISCOUNT, BULK BUYING.

aggregated rebate

a trade practice whereby DISCOUNTS on purchases are related not to customers’ individual orders but to their total purchases over a period of time. Aggregated rebate is used to foster buyer loyalty to the supplier, but it can produce anti-competitive effects because it encourages buyers to place the whole of their orders with one supplier, to the exclusion of competing suppliers. Under the Competition Act 1980, aggregated rebates can be investigated by the Office of Fair Trading and (if necessary) the COMPETITION COMMISSION and prohibited if found to unduly restrict competition.
References in periodicals archive ?
Speaking at the wholesaler's annual Budgens and Londis conferences last week, Musgrave Retail Partners GB MD Phil Smith said the company would help steer retailers through the "challenging times" with a combination of price : investment and margin improvement, as well as enhancing its overriding discount schemes.
And retailer rebates - the LOD overriding discount scheme - amounted to [pound]2 million, an increase of 20% on the previous year.
During the same period, affiliated retailers were paid 900,000[pounds] in LOD -- the Londis overriding discount scheme, which pays back a proportion of the money spent with the group.
Overriding discounts, which are invoiced separately by retailers when volume targets have been hit, are an obvious example of an irregular pricing mechanism.
Collins says some wholesalers were concerned they would lose income streams such as overriding discounts and advertising monies associated with direct trading.