Statement on price matching policies
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Re: Statement on price matching policies
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Re: Statement on price matching policies
Yes, when others here are talking about price matching, they refer to the practise of undercutting competitors by offering Lowest Price Guarantee. What you refer is a mutual agreement with all the distributors to keep the prices at a certain level. Both are essentially price-matching, but in a different way.Nescio50 wrote:So U.S. allows sellers to agree on (i.e. fix) retail prices, to form a cartelMeso wrote:Price matching is legal (again, U.S.), as it's up to the seller (brick & mortar store or ecom) if they wish to price match.
Still I read about fines for price fixing in the U.S. ... https://www.ft.com/content/569acdec-d2a ... 0c49b4b4c0
Probably I misinterpreted something ...
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Re: Statement on price matching policies
Re: Statement on price matching policies
This may shock many, but many countries do the same thing to other countries in the form of sanctions (withholding money to encourage them to change their behavior).
Bringing this into perspective, let's say the top Doll brand in the world wants to protect its well deserved reputation as the number one brand, because honestly it is. They create a MAP policy stating (in essence) sellers are prohibited from whoreingOut their dolls in advertising thus devaluing the brand in the consumers eyes. If you (not you Jeff specifically) had such a brand that you've invested literally everything into and grew into the top brand in the industry, wouldn't you want to protect it too?
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Re: Statement on price matching policies
Nescio, you aren’t wrong. Individual vendors and retailers have the autonomy to offer whatever prices they want though. Price matching is a vendor’s choice. However, collusion to manipulate pricing between two or more companies (price fixing) is illegal, whether the intention is good or not. It also gets complicated when individual companies become dominant in the market. Predatory pricing is also illegal; when dominant market share is leveraged to operate at a loss to ensure competitors will fail.Nescio50 wrote:So U.S. allows sellers to agree on (i.e. fix) retail prices, to form a cartelMeso wrote:Price matching is legal (again, U.S.), as it's up to the seller (brick & mortar store or ecom) if they wish to price match.
Nes, lowest price guarantee (aka price matching) is not known as price fixing. I think there was just a misunderstanding here. Your assessment is correct overall, in my experience. It would be illegal for Jinsan or any OEM to collude with vendors to set pricing, even if the intention was to ensure a level playing field for all vendors. Allowing this would be a double-edged sword once all parties realized they could take advantage of this. Humans have a very poor track record of doing the right thing when they have influence and power.Nescio50 wrote:[Responding to Dullahan] Sorry, I didn't know that 'lowest price guarantee' was also referred to as 'price fixing'. A 'lowest price guarantee' is legal here in NL/EU. I thought this thread was about a manufacturer forcing retailers to sell above a minimum price. Here (NL, most probably EU) that is considered illegal price fixing.
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Re: Statement on price matching policies
1) Currently, we do have minimum retail prices from an (increasing) number of manufacturers. Minimum retail pricing means, that vendors will/can be cut off when violating the minimum retail prices (= if sell for less than the set minimum retail price). That's a fact.
2) Also, we still have a number of manufacturers without any price regulation. Some of them state recommended retail prices, others permit anything the vendors do. That's a fact, too.
3) Now we have one legal environment - confirmed for the Netherlands and Germany, probably also for the rest of the EU - where any price regulation by the manufacturer is forbidden by law. That means, that any attemps to set minimum retail prices or penalties (sanctions) like cutting a vendor off for selling lower are illegal by the legal standards of this region (Netherland, Germany, probably EU; other areas are unclear).
4) And then we have another legal environment - the U.S. As far as I understand Meso's comments, in the U.S. a manufacturer is allowed to set a minimum retail price and to sanction violations.
5) And last but not least we have governments that give a s**t about the laws applicable to the private sector of their own economies - e.g. by subsidizing sectors in deficit like coal mining or agriculture, or sanctioning foreign econonomies with penalty customs (e.g. Chinese steel).
If I got that right, Chinese manufacturers have in regard to pricing to deal with at least to totally contrasting economic environmnts - a largely free market (EU) and a somehow controlled market (U.S.). They can try to impose minimum retail prices, but they might get sued for that in the EU.
That would mean that the instruments to sanction harmful price matching (= lowest price guarantee) would be really limited. The best (remaining) option would be recommended retail prices.
Did I understand this right so far?
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Re: Statement on price matching policies
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Re: Statement on price matching policies
Hi fellow Dutchie.! Yep, here companies too can control what price their product is advertised at. The first i heard about that was with the "supermarket/grocery store war" we had in the Netherlands. Advertising name brands discounts under cost as a loss leader.Nescio50 wrote:Sorry, I didn't know that 'lowest price guarantee' was also referred to as 'price fixing'. A 'lowest price guarantee' is legal here in NL/EU. I thought this thread was about a manufacturer forcing retailers to sell above a minimum price. Here (NL, most probably EU) that is considered illegal price fixing.
They didn't do any of those with coca cola. Coca coal would refuse to sell their product to the chain for some time and people would get their weekly groceries at the competitor.