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A Minimum Resale Price Maintenance Agreement Requires A Dealer Who Buys From A Manufacturer

Q: I am a health care provider and I want to join a new insurance group to provide services to a large employer in my city. My agreement with another insurance group requires that I give them the lowest price for my services. Do I have to lower my prices for the other insurance group if I join the new group? Maintaining resale prices prevents resellers from competing too prices, especially for fungible products. Otherwise, resellers are concerned that this will reduce profits for themselves and for the producer. Some [who?] say that the manufacturer could do this because it wants to keep the resellers profitable and thus keep the producer profitable. Others argue that, for example, the minimum durability of the resale price can address a failure in the distribution services market by ensuring that distributors who invest in the promotion of the producer`s product are able to recover the additional costs of such assistance in the price they charge consumers. Six years later, Robert Bork reiterated Telser`s argument that maintaining the resale price was only a form of contractual integration, like full vertical integration, which could be overcome by a failure in the distribution services market. Mr Bork also pointed out that non-tariff vertical restrictions, such as exclusive zones. B, could get the same results. Some producers also defend the maintenance of resale prices by saying that they guarantee fair returns for both manufacturers and resellers, and that governments have no right to infringe on the freedom to enter into contracts without good reason. Q: My provider offers a co-op promotion program, but I cannot participate if I apply for a price below the minimum price advertised by the supplier. I don`t think it`s fair.

There are pros and cons to being a franchise distributor. If you agree to be a franchised reseller, you would probably have to meet the manufacturer`s requirements for the sale of the product, for example.B. operating time, cleanliness standards, etc. These restrictions are considered reasonable restrictions on how you run your business, in exchange for trading with an established brand that connects consumers to a certain level of quality or service. For example, a brewer may require all retail stores to store their beer at a certain temperature in order to maintain its quality, because consumers are likely to accuse the manufacturer of poor quality – which reduces sales in all outlets – instead of blaming the retailer`s insufficient storage method. Agreement issues may arise when a producer has agreed with competing manufacturers to impose price or non-price restrictions in the supply chain (i.e., when dealing with suppliers or distributors), or when suppliers or distributors act together to induce a producer to apply such restrictions. Again, there is a decisive distinction between a unilateral decision to impose a (legal) restriction and a collective agreement between competitors to do the same (illegally). For example, a group of dealers has threatened not to sell a single auto plant unless the manufacturer assigns new cars on the basis of sales to customers in the territory of each dealership.