Legal question

[TheSpecialist]

If a big name fishing product line, and whoever else only sell product to authorized retailers, and specifically tell said retailers how much they can charge, how is this not a violation of the Sherman Act?


Seems to me this could be Concerted action, and price fixing no?

[Piscator]

This is how they do it legally:

For example, if you purchase these reels from us, we will give you 20% on as a backend rebate on everything you purchase from us. The 20% rebate is to be used to help run your business (advertising, catalogs, promotions etc). The MAP (Minimum Advertised Price) for these reels is $100. If you sell these reels lower than $100, we will pull all of your back end rebate.

Don’t think it’s just the fishing industry that does this. Almost all retail products have companies that operate this way.

[The Dad Fisherman]

Big Screen TV's are next.....supposed to go to that pricing structure April 1st

[Saltheart]

Doesn't seem right but that's how they do it or if they find out you are selling below min , you suddenly have supply problems from them. "oh we are out of stock....we will be shipping to you in two weeks...what? you didn't get your order? , etc , etc.

[JohnnyD]

Originally Posted by Saltheart

Doesn't seem right but that's how they do it or if they find out you are selling below min , you suddenly have supply problems from them. "oh we are out of stock....we will be shipping to you in two weeks...what? you didn't get your order? , etc , etc.

If manufacturers didn't limit the bottom number that their products could be sold for, then eventually retail competitors would keep decreasing the price to gain market share until selling that manufacturer's product is not profitable and they would move on to the next manufacturer.

I think the spirit of the Sherman act is to prevent companies from colluding and collectively driving up costs, and to limit the power of monopolies. For example, say that the owners of gas stations between Eastham and Welfleet "go out for beers on occasion" and agree on pricing that partially contributes to why gas is sometimes 30 cents greater in those two towns compared to off-Cape.

Because in all things fishing there are many choices, the consumer would not be negatively effected by a company like Van Staal telling retail stores the minimum price they can sell a reel. If the consumer doesn't want to pay $700 for a Van Staal, there are plenty of other choices.

[Mike P]

Originally Posted by JohnnyD

For example, say that the owners of gas stations between Eastham and Welfleet "go out for beers on occasion" and agree on pricing that partially contributes to why gas is sometimes 30 cents greater in those two towns compared to off-Cape.

Because in all things fishing there are many choices, the consumer would not be negatively effected by a company like Van Staal telling retail stores the minimum price they can sell a reel. If the consumer doesn't want to pay $700 for a Van Staal, there are plenty of other choices.

That's exactly right.