What is resale price maintenance NZ?
Resale price maintenance occurs when a supplier of goods enforces, or tries to enforce, a minimum price at which the reseller must on-sell those goods.
What is minimum resale price maintenance?
Resale price maintenance
put pressure on businesses to charge their recommended retail price or any other set price, for example by threatening to stop supplying to the reseller. stop resellers from advertising, displaying or selling goods from the supplier below a specified price.
What is a resale price maintenance policy?
Resale price maintenance is a practice in which a manufacturer fixes the price for the resale of a brand product and the retailer is not allowed to sell it at a lower price. Manufacturers use resale price maintenance to more directly prevent inter-retailer price competition.
Is resale price maintenance price fixing?
Under the Indian Competition Act, Resale Price Maintenance (RPM) is defined under Section 3(4) (e) of the Act as including any agreement to sell goods on the condition that the prices to be charged on the resale by the purchaser shall be the prices stipulated by the seller unless it is clearly stated that prices lower …
Why is resale price maintenance illegal?
RPM agreements are usually unlawful because they prevent you from offering lower prices and setting your prices independently to attract more customers. If you have been involved in RPM with your supplier, you may both be found to be breaking competition law.
Who sets the RRP?
the supplier
RRP is a price set by the supplier, as a recommendation to the retailer. It’s just what it sounds like: a recommendation. There are some suppliers who try and enforce a minimum retail price by threatening to withdraw distribution unless a reseller sells at a certain price – but this is against the law.
Can you sell things for more than RRP?
It is not illegal to sell products at prices below the Recommended Retail Price. However, it is illegal if the goal is to eliminate or damage the sales of smaller businesses. Predatory pricing aims to do this and it is illegal because it promotes unfair trading.
What is resale price maintenance and why is it controversial?
Resale Price Maintenance
That means they sell their products to different stores and set up contracts that require those retailers to charge customers a fixed minimum price. This is sometimes also called fair trade (although it has absolutely nothing to do with fairtrade).
Can a retailer sell above RRP?
Can you be charged more than RRP?
Another case for charging more than RRP is the availability of the goods you sell in a certain region at a certain time. For example, If there are not many 24/7 stores in an area, they can charge a little more. Of course, it’s up to you as the main business owner to decide the price.
Why is resale price maintenance bad?
Resale price maintenance (RPM) harms consumers with increased prices and damages business reputation as a consequence. Find out more about RPM in our video. RPM is illegal. It harms consumers, and the consequences for businesses found using RPM agreements are severe.
Do retailers have to honor pricing mistakes Australia?
If incorrectly priced items mislead consumers, this is a serious offence under the Australian Consumer Law. Generally, if a retailer displays multiple prices, they should honour the lower price. However, if an isolated product is incorrectly priced, a retailer often has the option of following their store policy.
What is predatory pricing?
In most general terms predatory pricing is defined in economic terms as a price reduction that is profitable only because of the added market power the predator gains from eliminating, disciplining or otherwise inhibiting the competitive conduct of a rival or potential rival.
How is RRP calculated?
Calculate your cost price. Calculate your wholesale price, by adding up cost and profit margin. Calculate your RRP (Recommended Retail Price), by multiplying your wholesale price by 2 or 2.5.
Can you go above RRP?
to claim that products are on sale, you should show the previous price and should have been selling at that price for a meaningful period of time. you must not claim a discount against the recommended retail price (RRP), if the RRP is significantly higher than the price generally charged for the product.
Is it illegal to display one price and charge another?
In general, there’s no federal law requiring companies to honor a price that’s wrong on the shelf. There are laws against false or deceptive advertising, but if a company can show the pricing error was just that, an error or mistake, then it’s not false advertising.
Can I charge different customers different prices?
Charging different prices to different customers is generally legal. The practice could be illegal, however, if the reason for the difference were reliance on a “suspect category” – race, religion, national origin, gender, or the like. The practice could also be legal if it violates antitrust or price-fixing laws.
What is collusive pricing?
Collusive pricing or price collusion is a scenario when several companies agree to set the price of the good or service unanimously. Their objective could be to earn more profit or gain more market share. Such collusive pricing is often practiced among duopolies or oligopolies.
What is aggressive pricing?
If you’re selling, aggressive pricing means your prices would be low to encourage sales, whereas if you’re buying, you would offer a higher price than your competitors. There’s also an implication that if competitors match your prices that you’re prepared to raise or lower them to be more competitive.
Can you sell higher than RRP?
you must not claim a discount against the recommended retail price (RRP), if the RRP is significantly higher than the price generally charged for the product.
Is a shop legally obliged to sell at the price displayed?
A retailer has no obligation to sell you the product at the price on the label but it’s illegal to display the wrong price.
Can you sue for incorrect pricing?
A criminal case can also be initiated against a business and an employee for overcharging in California Superior Court. The punishment that may be imposed in these types of proceedings for allegedly overcharging a customer will generally depend on the amount of the overcharge.
What are the 3 types of price discrimination?
There are three types of price discrimination: first-degree or perfect price discrimination, second-degree, and third-degree.
What are the 3 types of collusion?
Types of collusion
- Formal collusion – when firms make formal agreement to stick to high prices. This can involve the creation of a cartel.
- Tacit collusion – where firms make informal agreements or collude without actually speaking to their rivals.
- Price leadership.
What is predatory dumping?
Predatory dumping refers to foreign companies anti-competitively pricing their products below market value to drive out domestic competition. Those who practice predatory dumping are forced to sell at a loss until the competition is wiped out and monopoly status is achieved.