Reason the EU can fuck right off number MCVII

According to a draft regulation drawn up by the European Commission and seen by Reuters, suppliers may be allowed to require that distributors have a \”brick-and-mortar\” shop before they can sell online.

It\’s retail price maintenance for luxury brands by the back door.

No, fuck off.

15 comments on “Reason the EU can fuck right off number MCVII

  1. I see a business opportunity arising – a shop that has a multitude of in store ‘franchises’, of approximately a couple a yards square. You pay the shop owner to rent your ‘store’, send a few items of stock, shop owner opens for a few hours a day, and deals with any sales, job done. Shop could be anywhere, the cheaper location the better.

  2. And what exactly is wrong with Retail Price Maintenance?It was recently-ish legalised by the American Supreme Court by some heavyweight economists giving evidence in favour.The online retailers in the US were bricking it.
    Credit where’s its due: you were pretty sharp the beneficent RPM implications.

  3. See above: you put me off my stride with your reference to Retail Price Maintenance.It is of course Resale Price Maintenance.

  4. As a generality, I’m of the opinion that this amounts to nothing more than a contractual arrangement and that parties should be able to arrange such matters (including price maintenance) any way they see fit.

    In the U.S., somewhere back around 1947 or 1948, “Fair Trade” laws by means of which mfrs. enforced price conformity on retailers were broken (Macy’s in NYC was a leader), I believe as an “unfair” restraint of trade.

    Personally, I don’t particularly like the idea of mfrs sticking their nose into the retailer’s business but don’t see anything basically unfair about it. I don’t see anything basically unfair about a manufacturer (or even someone lower on the supply chain) requiring conformance with any given set of standards; they should be free to do what they think best for their business.

  5. “Personally, I don’t particularly like the idea of mfrs sticking their nose into the retailer’s business but don’t see anything basically unfair about it.”

    OK – put that into contracts. It doesn’t need laws involved.

  6. Implementing this would be insane.

    Given the fragile state of the economies that make up the EU, lumbering them with more regulation and higher costs would only shrink the demand base further and loss us more jobs.

    It makes about as much sense as ordering everyone who wants to trade online to own a black cat. But that won’t stop the bosses over at Brussels.

  7. @Joseph Tagaki
    British manufacturers were once able to stipulate that retailers did not discount their goods.This was what RPM was all about. It was pro-competitive because a) manufacturers set their own prices,trying to steal a march on competitors b) there were more small brands because they were not obliterated by supermarkets competing to sell the most popular line at massive discounts,so making other small-producer lines unsellable.
    But the Conservatives ,despite the pleas of their small shopkeeper voters, got rid of RPM in 1964.

  8. DBC Reed,

    I don’t think that anyone should be able to stipulate terms to anyone but who they have a contract with. In other words, if they sell to a distributor and there’s nothing in my contract with a distributor, then I’m entitled to sell at any price that I want.

    On the other hand, I personally don’t like what I would describe as “post-sale conditions”. If you sell me something, then it’s mine to do with as I please.

  9. @Joseph Tagaki,
    Seems rather a contradiction.
    You say that if you sign a contract to sell at the manufacturer’s stipulated retail price ,you should honour the contract (RPM).Or once you have bought goods you can do what you like with them.
    Including sell them at a huge discount (as in the present rigged market ),so that the public seeing the discounted prices,think that the normal prices ( on which the manufacturer makes a profit )are overcharging, stops buying them,so making it impossible for the manufacturer to plan any kind of future development.
    You get the classic “Middlemen dominate the primary producers” scenario that the American People’s Party (the Populists)was going on about over a hundred years ago.Their idea of primary producers was their voter base : small farmers .But UK farmers still squirm under the control of the middlemen now.
    Reed’s Third Law: left to themseves (laissez faire) markets get dominated by monopolies,that of the retailers being worst of all.

  10. The point you make in the previous post (Marx was right) actually explains this. Technological change (online retailers undercutting traditional ones by having lower overheads) is bringing about social change and the dinosaurs at the eu loath and fear this. It threatens the entire model upon which their attempt to control and direct the people of europe is built.

  11. DBC Reed does rather tend to bang on about RPM being a good thing. I’m an absolutist on this: any government-sanctioned constraint on the price at which a good may be sold is a priori bad, simply because it’s a rent-seeker’s charter. Sign minimum sales prices into the contract, fine. Contracts are good. They’re like trades. Both parties enter into them voluntarily in the expectation that they will profit thereby. Price management via legislation is cretinous. We know it doesn’t work. It may be advantageous for the supplier. Screw ’em. It’s bad for everybody else. Simply on a straight utilitarian argument it fails. Has the diversity of literature in the UK been adversely affected by the abolition of the Net Book Agreement? No, of course not, and anyone arguing otherwise deserves to be pelted with rotten fruit. Has the abolition of the NBA led to wider availability of books at lower prices? Unequivocally. Setting prices by fiat is, and always has been, stupid.

  12. lumbering them with more regulation and higher costs would only shrink the demand base further and lose us more jobs.

    chefdave, you don’t understand – they are creating more jobs in the bureaucracy. That’s how they think.

    distributors have a “brick-and-mortar” shop before they can sell online.

    OK, so Amazon buys Jewson, problem solved.

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