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).
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

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.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
The black list mentions (1) resale price maintenance, (2) market partitioning by territory or customer group, (3) restrictions of sales to end users by members of a selective distribution network, (4) restriction of cross-supplies within a selective distribution system, and (5) restrictions preventing end users, independent repairers, and service providers from obtaining spare parts directly from the manufacturer.
Much of this paper focuses on determinants of the most controversial vertical restraint: resale price maintenance. First, we propose a simple theoretical framework in the context of intra-brand competition.
This case upheld a resale price maintenance agreement on Leegin specialty leather goods against Kay's Kloset, which used the goods for loss-leader advertising.
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.
The Supreme Court's recent decision to move to rule of reason treatment for all resale price maintenance has expanded the choice set of companies for distributing their products and, as described above, this should result in some lowering of firms' costs and increased efficiency in providing distribution services to consumers.
The Court's rejection of the per se rule as applied to resale price maintenance schemes in Leegin Creative Leather Products, Inc.
Yamey (London School of Economics and Political Science) edited this series of essays that compare the resale price maintenance practices of Canada, United States, Sweden, Denmark, Ireland and the United Kingdom, noting how the development of public policy can influence the price of goods.
would be to make minimum resale price maintenance per se unlawful." (116) The dissenters acknowledged that Congress did not prohibit the Court from reconsidering the per se rule, but nevertheless argued that "enacting major legislation premised upon the existence of that rule constitutes important public [that is, legislative] reliance" on it.
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.
"Minimum resale price maintenance alleviates the problem because it prevents the discounter from undercutting the service provider.
The TPA defines resale price maintenance (RPM) as follows: "(a) the supplier making it known to a second person that the supplier will not supply goods to the second person unless the second person agrees not to sell those goods at a price less than a price specified by the supplier; (b) the supplier inducing, or attempting to induce, a second person not to sell, at a price less than a price specified by the supplier, goods supplied to the second person by the supplier or by a third person who, directly or indirectly, has obtained the goods from the supplier; ...