RESTRAINT OF TRADE

Hokitika Guardian, 3 October 1931, Page 6

RESTRAINT OF TRADE

AN IMPORTANT DECISION. (London “Times.”) A committee was appointed by the Lord Chancellor and the President of the Board of Trade to consider the pre sent trade practices . which result in withholding from particular retail tradeis supplies of goods in which they wish to deal or which prevent the resale of such supplies except upon conditions imposed by the suppliers. The Committee were asked to say whether a I lor any ol such practices were detrimental to the public interest and il so what alterations is the iaw wore necessary to prevent their continuance. Clearly the private grievances of individual traders were not the concern of the Committee, who took the view that the injury contemplated by the terms of reference must be sufficiently important to call for a change in the law and alter a careful investigation they made no recommendations for any such change. In one war it was unfortunate that the terms of reference were not tyider, since in the course of the inquiry it was found to be a common complaint that retail prices have not kept pace with the fall in prices of raw material, and it might have been very useful if an authoritative pronouncement, had been made explaining'the reason for this lag, but it- was thought that the subject was outside the terms of reference.

The greater part of the Committee s attention was devoted -to considering the case of withholding supplies as a method of enforcing fulfilment of conditions imposed by the supp’iers, which almost invariably related to prices. There is nothing illegal in an agreement' by a number of manufacturers to the effect that they will only supply goods to a trader who observes tlie conditions which they think right t® make a part of the bargain of sale and in the case of a patented article the case for the patentee is even stronger, since if the sub-purchaser of a patented article has notice of the cmiditionis attached by the patentee an action can be brought against him if he does not keep them.

It seems to be a growing; practice for manufacturers to impose conditions upon retailers and wholesalers regarding retail prices, but trades which handle fasion or high perishable goods are scarcely affected. General price maintenance refers to what is kno” ’ as proprietary goods, distinguished by a label or trade mark. In this con-' iiexion it is interesting to note that an ordinary grocer's stock probably contains goods of which one-sixth are branded bu not subject to price restriction, one-third branded goods on which price is maintained, and the other half unbranded .goods on which there is no restriction as to pricThere are obvious reasons why a nn 1 1factnrer who creates a demand tor a branded article should desire that all retailers who stock it should veil at a fixed price, and it is clear tn t no retailer‘ is under any 1 -‘corn,jLf-on---br stock or consumer to hnv II ho does not wish to do so on the • er.us fixed there are plenty of unbranded gods for those who do not insist, on a quality guarantee from the makers. Meanwhile, there is no grievance il, having created a demand for his branded article, the owner declines to allow any to share in the profits flowing from that demand unless they agree to his conditions. c .