The importance of competition policy
An Office of Fair Trading case study

Page 8: Resale price maintenance

Attempts by manufacturers or suppliers to enforce a minimum price at which goods can be sold by dealers or retailers restrict competition and can keep prices higher than they would otherwise be. Such resale price maintenance is illegal under the Resale Prices Act, unless the goods are granted an exemption. Only books and certain pharmaceuticals are currently exempted.

The Act also makes it unlawful to stop supplies or offer less favourable terms to dealers whom the supplier believes to be price cutting. A supplier is, however, entitled to withhold goods from a dealer who is pricing them as loss leaders (goods sold at a loss in order to attract customers towards profitable items).

The Director General has the power to seek a court injunction to force the parties involved to scrap a retail price agreement, but he usually deals with matters by accepting assurances.

Office of Fair Trading | The importance of competition policy


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