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 ?
The prohibition of resale price maintenance covers both direct agreements on fixed or minimum resale prices or agreements achieving resale price maintenance through indirect means, such as fixed distribution margins, maximum discount levels, rebates dependent on the observance of a given price level or the termination of deliveries as a response to a given (too low) price level.
Resale price maintenance is used more frequently in sectors where it has traditionally been legal (e.
In other words, this is the reason why "The primary accepted pro-competitive efficiency rationale for resale price maintenance is the prevention of retailer free-riding" (KLEIN, 2009).
The second concession made to supporters of resale price maintenance involved the "right to refuse to sell.
Sections 44ZRR and 44ZZRS replicate the previous anti-overlap provisions of section 45, and state that conduct that can be assessed under the Resale Price Maintenance or Exclusive Dealing provisions, as well as the Cartel Provisions, must be assessed under the Resale Price Maintenance or Exclusive Dealing provisions.
18) This Note will also generally discuss potential effects of the Court's application of the rule of reason to resale price maintenance on the producer-dealer relationship.
Miles (191l) case that all resale price maintenance is per se illegal under Section 1 of the Sherman Act.
would be to make minimum resale price maintenance per se unlawful.
Park & Son, the court ruled that resale price maintenance agreements were illegal per se--illegal by their very nature--and defendants had to prove their actions did not violate anti-competitive provisions of the Sherman Anti-Trust Act.
In 1975 Congress repealed two laws that allowed individual states to enact their own fair-trade laws allowing minimum resale price maintenance.
The ACCC alleged that respondent's conduct breached Section 48 of the TPA in that its conduct amounted to resale price maintenance under Section 96(3) of the Act.