Aug 25, 2007

Pressures Rise for Overseas Markets to Match New US Distribution Law

A recent US Supreme Court ruling has given manufacturers the right to set minimum prices at which their goods can be sold by retailers. The US decision allows courts to consider the effect of "retail price maintenance" before ruling on legality.The case will likely have major implications for Australian exporters and regulators, writes Marc Moncrief from Australia in The Age.

Meanwhile, in Australia, manufacturers are allowed to set a maximum price at which their goods can be sold but setting a minimum price is illegal, whether the arrangement has competitive benefits or not.

Yet there is evidence that Australian manufacturers will probably agitate for change and that the free trade agreement with the US would militate for the two countries to keep in step

Australian lawyer Bob Baxt goes on to say that: "Lots of agreements are international in scope and businesses operate internationally. Why should they have to have a different set of rules in one country to another.... there will be some interesting pressure from a lot of manufacturers and others who will say 'why shouldn't we be able to impose constraints on the way in which our products are sold?"

In any event, experts acknowledge that businesses exporting to the US will be able to use the decision in negotiations with retailers, and that its most immediate impact is not on the Australian regulatory framework. Its most immediate impact is on the Australian exporters into the US market.

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