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Refusal to supply

Refusal by producers to sell their goods to all applicants. This is believed to inhibit competition between distributors. Firms may wish to restrict their outlets because they believe that some distributors would undermine the reputation of their products by selling them without proper storage facUities, advice to customers, and installation services, or in some cases simply by trading in sordid premises that would impair their prestige. Refusal to supply may also take place when a producer prefers to sell through outlets which do not stock rival products. Refusal to grant trade credit on the usual terms may be due to doubts about a distributor’s solvency.

Reference: Oxford Press Dictonary of Economics, 5th edt.