Resale price maintenance: what you need to know
What is resale price maintenance?
Resale price maintenance (RPM) involves an agreement between a supplier and a reseller, usually a retailer, preventing the reseller from setting its own prices for goods or services. The agreement requires the reseller to sell the goods or services at, or above, a specified price or margin, which is usually decided by the supplier.
RPM is usually unlawful and a breach of Section 4 of the Competition Act 2002, as amended. RPM arrangements prevent retailers from setting their prices independently.
This restricts businesses from competing properly and is a serious breach of competition law.
You may be concerned that, if you do not agree to maintaining prices dictated to you, your supplier may stop doing business with you. However, you should be aware that even if you agree to RPM reluctantly or as a result of threats, you may be in breach of the law as well.
What’s the harm?
When businesses engage in RPM, consumers lose out because prices are kept artificially high and consumers have no possibility of shopping around for better value.
Are recommended resale prices allowed?
Suppliers are free to recommend prices at which resellers may resell products. This is known as a recommended resale price (RRP), and is not RPM as a reseller may resell products at a price of their own choosing. However, if a supplier tries to force a reseller to sell at the RRP, this is RPM.
What can you do?
Suppliers and resellers should review their practices around pricing and discounting policies to ensure that they do not risk entering into illegal agreements. If you believe that your business is, or has been involved in an RPM arrangement you should contact the CCPC as soon as possible. You may also wish to seek independent legal advice
You should also contact the CCPC if you have information about other businesses in your industry that may be engaged in RPM arrangements.
You can contact the CCPC via our make a competition complaint webform or call 01 402 5500.Return to Guidelines for Business