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Resale price maintenance

Attempts by the manufacturers or suppliers of goods to dictate the price at which, or the conditions on which, goods are to be sold by the retailer. Although common at one time in the U.K., and during wartime actually compulsory for goods subject to price control, the practice has now been made virtually illegal. Manufacturers can now fix and enforce prices only where an agreement has been entered into and registered under the Restrictive Trade Practises Act 1956. Registration will only be accepted if the Restrictive Practises Court considers that price maintenance is in the public interest, and only in very few cases has it been deemed to be so. The best-known agreement is the net book agreement between publishers and booksellers, but the prices of certain pharmaceutical products are also maintained.

The abolition of price maintenance was underlined again with the Resale Prices Act 1964, and suppliers are now not only prevented from fixing prices but also from withholding supplies from traders who sell at low prices – though they can interfere if the trader is using the goods- as loss leaders. The withholding of supplies is taken to mean not only cutting them completely but also refusing to supply on customary terms or terms available to dealers generally. Although price maintenance by suppliers has been all but eliminated, the practice of publishing a manufacturer’s recommended retail price has tended to take its place in giving back some control over retail prices to the suppliers.

Reference: The Penguin Business Dictionary , 3rd edt.