Decoding Manufacturer Pricing Policies
Considering their impact on sales strategies and profitability, manufacturer pricing policies often go unremarked upon. They’re just part of the business relationship between manufacturers and distributors, typically surfacing in updated agreements, policy letters, or emails that outline how products can be advertised and, in some cases, sold. But the effects of those policies can be wide-ranging. For foodservice equipment and supplies distributors, manufacturer pricing and territory policies shape how they advertise, what they can say about price, and where they can sell. A change to a resale or distribution policy can affect margins and online promotions in meaningful ways. For these reasons, federal and state antitrust laws govern the way manufacturers write, communicate, and apply these agreements. Today’s rules around manufacturer pricing policies primarily stem from a 2007 Supreme Court decision, Leegin Creative Leather Products v. PSKS, that required courts to evaluate such policies under a rule-of-reason approach — that is, evaluating whether the effects of a given practice are more anticompetitive or procompetitive.
