Takealot's dominance in South Africa explained

[cda]

It's not. It's in the contract that you have to abide by their RSP.

That literally defines collusion. Look it up.

 

[Neoprod]

That literally defines collusion. Look it up.

Not really....a manufacturer of a specific product can set the MSRP of that product. Everyone who contracts with the manufacturer to sell that product has to abide by that (if the manufacturer wants it that way).

If all the manufacturers of that same product (who are supposed to be competing with each other for contracts) got together and decided to set their prices the same, that's a problem.

 

[cda]

Not really....a manufacturer of a specific product can set the MSRP of that product. Everyone who contracts with the manufacturer to sell that product has to abide by that (if the manufacturer wants it that way).

If all the manufacturers of that same product (who are supposed to be competing with each other for contracts) got together and decided to set their prices the same, that's a problem.

That extends to resellers and suppliers who are also supposed to compete with eachother on the margin offered by the manufacturer. It's a Manufacturer suggested retail price, not a mandated retail price for that exact reason.

If someone wants to make a loss to get customers through their door they are free to do so, it's not legal for any of their competitors or a supplier to try and stop them with the exception of a supplier agreement where the retailer is not actually buying the stock and reselling it but rather facilitating an order without holding stock.

 

[Swa]

That extends to resellers and suppliers who are also supposed to compete with eachother on the margin offered by the manufacturer. It's a Manufacturer suggested retail price, not a mandated retail price for that exact reason.

It doesn't. Suppliers and manufacturers setting the prices their products have to be sold at is no different than sellers deciding what they're sold at. There's still competition among them. It's only collusion when a number of suppliers get together and decide what the collective prices should be.

This can actually be a good thing. Your small mom and pop shop can still make a profit and Takealot for instance can't undercut them to force them out and then inflate the price.