More on Minimum Price Supreme Court Decision

More on Minimum Price Supreme Court Decision

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The comments and speculation are still rolling in regarding the late June Supreme Court decision on minimum pricing. In the landmark Leegin Creative Leather Products, Inc. v. PSKS, Inc. case, the Court found that agreements between a manufacturer and a reseller that set the minimum price for which the manufacturer’s goods could be sold are no longer always illegal. The decision suggests that the “rule of reason” should be applied to determine whether or not a supplier’s pricing practices are illegal. Previous anti-trust rulings made it difficult for vendors to enforce most MAP pricing schemes.

With the new ruling, today’s court says such pricing policies must be considered on a case-by-case basis to determine if and when vendors’ set pricing strategies stifle competition. In the commentary and coverage which followed the ruling, assessments reflected each observer’s retail perspective.

Supporters of manufacturers or specialty retailers hailed the ruling as a return of reason to a retail landscape never envisioned when the court outlawed price floors almost a century ago. The Photo Marketing Association comments that we ran in this space a couple of weeks ago said it “sees this support of competition in the retail marketplace as a good way to allow consumers to choose what they want from a retailer,”—with this cautionary note: “The court did recognize the ever present danger of unlawful price fixing associated with the development of cartels that limit competition.”

Many of the retailers we spoke with welcome the ruling as holding promise of real rewards for their efforts, while tempering expectations for what it could mean with a “let’s wait and see” attitude.

David Guida, owner of Livingston Camera, Livingston, NJ and president of the PhotoFair Stores buying group says, “I’d like to hope this decision represents a positive step for the smaller retailer as the Internet, and the companies which sell exclusively online, have really made it difficult for all of us.”

In Aiken, S.C., Chris Lydle, independent owner of Chris’ Camera Center, believes the real value of the ruling will be determined by suppliers. “If it actually is implemented by manufacturers it will be a good thing for specialty dealers,” he says. “But it all comes down to the enforcement of a minimum price.”

A minimum set price could force consumers to look at all a retailer provides. “There’s a perception among many consumers that we (specialty dealers) sell products at a higher price than other retail outlets, even though we’re often selling at or near the same price with much more service and support behind what we sell,” Lydle notes

“If this is actually enforced, and helps us eliminate those perceptions, so much the better.”

Time will tell.

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