Manufacturers sometimes provide suggested prices for products sold to wholesalers and retailers. If a wholesaler or retailer sells such a product at a price significantly lower than the suggested rate and consequently affects the market price of the product, is it in violation of the Fair Trade Act when the manufacturer discontinues supply to such a wholesaler or retailer?

Home Service FAQsResale Price MaintenanceManufacturers sometimes provide suggested prices for products sold to wholesalers and retailers. If a wholesaler or retailer sells such a product at a price significantly lower than the suggested rate and consequently affects the market price of the product, is it in violation of the Fair Trade Act when the manufacturer discontinues supply to such a wholesaler or retailer?

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5. Manufacturers sometimes provide suggested prices for products sold to wholesalers and retailers. If a wholesaler or retailer sells such a product at a price significantly lower than the suggested rate and consequently affects the market price of the product, is it in violation of the Fair Trade Act when the manufacturer discontinues supply to such a wholesaler or retailer?

A5:

As stated in Article 19 of the Fair Trade Act, “An enterprise shall not impose restrictions on resale prices of the goods supplied to its trading counterpart for resale to a third party or to such third party for making further resale.” This means that an enterprise may not discontinue supply to punish its downstream wholesalers or retailers for failing to sell products supplied by the enterprise at suggested prices agreed upon. Otherwise, it may be considered in violation of Article 19 of the Fair Trade Act.

Relevant article(s) of law: Fair Trade Act, Article 19

Updated at：2016-02-22 11:52:13

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