Eugene F. Zelek, a Partner in the Corporate and Litigation Practice Groups, and Brian R. Henry, Competition Counsel, The Coca-Cola Company, have authored, “Establishing and Maintaining an Effective Minimum Resale Price Policy: A Colgate How-To”.
ABOUT THIS ARTICLE:
Significant discounting of a product can adversely affect the manufacturer, its resellers and the product itself by eroding brand image, jeopardizing the manufacturer’s ability to invest in new technology and product improvements, and discouraging the provision of desirable pre- and post-sale customer support services. An increasingly popular way to address these concerns is through the implementation of so-called “Colgate policies”—whereby a supplier, without reaching an agreement, suggests a minimum or exact resale price and refuses to make further sales to any reseller that does not comply. Indeed, many well-known manufacturers have adopted these policies successfully in such diverse industries as consumer electronics, furniture, appliances, sporting goods, luggage, handbags, agricultural supplies, and automotive replacement parts.
It is reprinted with permission from Antitrust magazine, Summer 2003, a publication of the ABA Section of Antitrust Law.