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resale price maintenance

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The fixing by a supplier of the price at which his goods may be sold by others. This may be attempted by contractual arrangements or by non-legal means, such as blacklisting by trade associations. Resale price maintenance is now prohibited by the Competition Act 1998 and Article 81 of the Treaty of Rome. Provisions in contracts of sale between suppliers and dealers fixing minimum prices are void, and it is illegal to withhold supplies on the grounds of adverse pricing. Fines of 10% of turnover can be imposed for breach of these provisions. Formerly, resale price maintenance was permitted for books and certain non-prescription drugs, but even these exceptions have now been declared illegal. In 2003 ten businesses, including the Football Association and Manchester United FC, were fined a total of £18.6M by the Office of Fair Trading for fixing the price of Umbro replica football kit in breach of the Competition Act 1998.

Subjects: Social sciences

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