foto_fool
Well-known
Folks I see some confusion in this discussion between manufacturers and retailers. Make no mistake about it - this is a ruling in favor of big business. Remember a while back when AMD was hammered on by the SEC for collusion in "fixing" prices for a major food additive? Well, after this decision big manufacturers have a lot less to fear from anti-trust regulators.
Now, today, the executives from Kodak and Ilford could call each other up and have a discussion along the lines of - "you know, it would make our shareholders happy if we took a 10% increase in our suggested retail across our product line, but we don't want to do it unless you guys do the same - think you could sell that to your Board? You could? Great - done."
The Wal-Marts of the world will still have the leverage to cut better deals with manufacturers, and some of us will still be able to "pay less than retail". It is now just more likely that the retail will be higher. Adam Smith should be spinning in his grave.
And for those of us who buy money to keep our businesses running - this anti-competetive ruling is likely to raise inflationary pressures, which means that the Fed will have to move interest rates up.
This issue will not reappear before this Court, or any one in the future, unless Congress toughens anti-trust law again, and some big manufacturer runs afoul of the new regs.
- John
Now, today, the executives from Kodak and Ilford could call each other up and have a discussion along the lines of - "you know, it would make our shareholders happy if we took a 10% increase in our suggested retail across our product line, but we don't want to do it unless you guys do the same - think you could sell that to your Board? You could? Great - done."
The Wal-Marts of the world will still have the leverage to cut better deals with manufacturers, and some of us will still be able to "pay less than retail". It is now just more likely that the retail will be higher. Adam Smith should be spinning in his grave.
And for those of us who buy money to keep our businesses running - this anti-competetive ruling is likely to raise inflationary pressures, which means that the Fed will have to move interest rates up.
This issue will not reappear before this Court, or any one in the future, unless Congress toughens anti-trust law again, and some big manufacturer runs afoul of the new regs.
- John
Al Patterson
Ferroequinologist
I think you meant ADM
I think you meant ADM
AMD makes chips and competes with Intel. Other than that, you are spot on.
I think you meant ADM
foto_fool said:
AMD makes chips and competes with Intel. Other than that, you are spot on.
foto_fool
Well-known
Al Patterson said:
You are right sir! And I am dyslexic! I was referring to Archer Daniels Midland (ADM, as in "hi I'm Bob Dole, Senator from ADM). Regards - John
mervynyan
Mervyn Yan
goo0h said:
You are 100% correct-
Once ZI is allowed to set MSRP legally (in US anyway), Tony is probably not going to carry ZI if the margin is too low. B&H may afford to do so. But then again, I don't know where Tony sources his ZI stuff, or he can import from some foreign dealers, that is still a gray market product, not covered by US warranty.mervynyan
Mervyn Yan
anselwannab said:
yes you can, it is called "cartel", just like OPEC. If this ruling is sustain, even though price-fixing is still illegal, there will be an implicit arrangement you can not prosecute due to lack of evidence. For example, if leading providers set floor price, enemy can befriend. the entire game theory on competition would collapse.
luckily, we can go shopping internationally, have to pay higher shipping cost, but that's my milk money
ywenz
Veteran
damn I gotta pay more for stuff now? this is not good news..
troym
Established
I'm not an expert in anti-trust law, but there's nothing in this decision that necessarily approves minimum retail price restrictions.
A manufacturer could still get hit with an anti-trust suit for imposing such restrictions. Until now, they were considered per se violations of the anti-trust laws. The Supreme Court's decision allows minimum price agreements to be judged instead on a case-by-case basis.
Unfortunately, that will probably generate more litigation. And anti-trust litigation tends to be *long* and costly. Small-time retailers will most likely give in to the msrp rather than get involved in lengthy litigation. So, on balance, unless the state and federal anti-trust authorities get involved, this isn't a great day for consumers.
A manufacturer could still get hit with an anti-trust suit for imposing such restrictions. Until now, they were considered per se violations of the anti-trust laws. The Supreme Court's decision allows minimum price agreements to be judged instead on a case-by-case basis.
Unfortunately, that will probably generate more litigation. And anti-trust litigation tends to be *long* and costly. Small-time retailers will most likely give in to the msrp rather than get involved in lengthy litigation. So, on balance, unless the state and federal anti-trust authorities get involved, this isn't a great day for consumers.
anselwannab
Well-known
mervynyan said:You are 100% correct-
Tony's price and margins would go up, if I get the jist of what people are saying. The ruling is about manufacturers being able to stop people from selling at below a bottom price. So Tony's price would, I have no idea of his particulars, go up. His selling prices go up and his wholesale prices stay the same, larger margins. See, a company can't sell to different distributors at different prices except if there is some logical and legal reason. So someone with low overhead (implying low service) can sell at a lower price than someone with higher overhead (more service). So you go to a retailer, get him to spill all his candy and knowledge, then you order it online from someone else.
I don't think this will really change things all too much. Companies have gotten pretty sophisticated at keeping people from price cutting and undermining prices.
In some ways, it is trying to save manufacturers from themselves. If a distributor is selling at low margins and siphoning off business from full service channels, cut them off. Plus, they can't tell their higher margin retailers that they can't control what price others sell their product.
The example of two manufacturers colluding on a price is moot for two reasons. One, that's illegal now, at least in the US. Two, they could just as well raise their distributor prices in sync. This is about retail prices. Why would two manufacturers conspire to raise their retail prices and increase margins for their sellers?
ferider
Veteran
mervynyan said:luckily, we can go shopping internationally, have to pay higher shipping cost, but that's my milk money
Except for food and gas
Thanks for your posts, mervynyan & John. Very instructive.