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Resale Price Maintenance in Great Britain*

Published online by Cambridge University Press:  07 November 2014

L. A. Skeoch
L. A. Skeoch*
Affiliation:
Ottawa
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Extract

This, one of the extremely limited number of full-length studies devoted exclusively to resale price maintenance in Great Britain, is a doctoral thesis submitted to the University of Amsterdam. The author, apparently trained in economics at British universities, also claims a “connection with the trade in branded consumer goods” lasting “for a number of years.” In his introduction, Dr. Kuipers expresses particular dissatisfaction with the theoretical analyses advanced by British economists, which, he claims, are inadequately supported by “facts.” His own analysis he believes to be sufficiently comprehensive to enable him to derive a formula, “the adoption of which … would provide an adequate solution to the problem [of resale price maintenance] in Great Britain under present conditions” (p. 3). The degree to which other economists will recognize this ambitious claim will depend on whether they accept Kuipers' analysis of what “the problem” of resale price maintenance is and, for those who do, whether they also believe that his particular scheme is desirable and administratively feasible.

The volume is divided into two parts: the first deals in a general way with the legal and economic aspects of resale price maintenance in Great Britain and lays the basis for Dr. Kuipers' policy recommendations; the second part deals with the nature and extent of price maintenance in the British grocery trade. Although more than one hundred pages are devoted to the latter section, the empirical data upon which the statistical analysis is based are very sketchy. Dr. Kuipers is not unaware of this weakness but he considers the results “generally accurate” and “sufficiently near the mark.” Whether or not one agrees with this assessment, there can be little question that Dr. Kuipers has achieved as much as an individual investigator, working unassisted, could hope to do.

Type
Notes and Memoranda
Information
Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique , Volume 19 , Issue 1 , February 1953 , pp. 81 - 86
Copyright
Copyright © Canadian Political Science Association 1953

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Footnotes

*

This note began as a review of Resale Price Maintenance in Great Britain, by John Dennis Kuipers (Wageningen: N. V. Drukkerij “Vada,” 1950, pp. xi, 251).

References

1 Throughout, the higher percentages apply to sales in the “agricultural working-class trade,” and the lower percentages to the “medium class trade”; the percentages applying to the “industrial working-class trade” fall between these two extremes. Unfortunately, no attempt is made to explain the factors that might account for the differences in the price-maintained percentages by the class of trade.

2 There is no comparable estimate available which includes the whole range and volume of grocery-store sales. The following comments in the Lloyd Jacob report are, however, of interest. “It was estimated by one of our witnesses that, on a turnover basis, about 25 per cent of branded grocery products are included on the Protected List of the Grocery Proprietary Articles Council” (p. 50). “As we have indicated, a large number of manufacturers of grocery products operate their own price maintenance schemes. Representatives of one such company told us that they had traded successfully on the basis of a recommended price, and that they did not favour the wide sanctions of the G.P.A.C.” (p. 51). Report of the Committee on Resale Price Maintenance, Cmd. 7696 (London, 1949).Google Scholar

3 The percentage of chain sales of grocery and combination stores and meat markets to total sales of such outlets in 1946 was 24.1 per cent. “Chains” are defined as “all retail organizations operating four or more retail outlets, excluding department stores.” Dominion Bureau of Statistics, Retail Trade in Canada, 1946, p. 13.Google Scholar If meat markets were excluded, the share of the chains in the “grocery and combination stores” category would show a rise to about 30 per cent, but this would be partially offset if, as in Kuipers' computation, chains were defined as those organizations with five or more branches. Co-operative societies are of negligible importance in the Canadian grocery trade. The fact that there is a smaller proportion of urban population in Canada than in Great Britain undoubtedly contributes to the difference in the percentage of sales enjoyed by chains and co-operatives in the two countries. Since 1946, the chains have shown a moderate increase in their share of the trade in Canada.

4 Grether, Ewald T., Resale Price Maintenance in Great Britain, University of California Publications in Economics, II, no. 3, 1935.Google Scholar “It seems entirely reasonable that systems of price maintenance subsidize rather than penalize the co-operative societies when the societies have access to goods and are permitted to sell at the same level and to give dividends” (p. 304). “In fact, the remarkable financial success of the Boots Pure Drug Company lends considerable support to the generalization that price control may benefit rather than handicap chain-store systems” (p. 310).

5 United States, House of Representatives, Hearings of the Committee on the Judiciary, 1914, II, 1690.Google Scholar

6 See, for example, Joint Committee of the Senate and the House of Commons on Combines Legislation, Minutes of Proceedings and Evidence (Ottawa, 12 6, 1951), pp. 718–19Google Scholar; and, for a highly confused version, United States Senate, 82nd Congress, 2nd Session, Annual Report of the Select Committee on Small Business, Report no. 1068, p. 214.

7 “The deathblow to the Waterbury was its use as a premium to sell men's suits: a watch was given away free with a suit of clothes.” Palmer, Brooks, The Book of American Clocks (New York, 1950), 13.Google Scholar The Waterbury watch was apparently used as a premium with other products as well. See Brearley, H. C., Time Telling Through the Ages (New York, 1919), 192–4.Google Scholar

8 “Breaching Macy's 6%,” Business Week, 04 26, 1952, 48.Google Scholar

9 Cf. the comment: “As the recent price wars showed, Macy's is no longer able to crack a whip over New York retailers.… There are some other big, powerful, smart merchandisers in New York today—and nobody, not even Macy's can undersell them.” Ibid., 50.

10 United States Senate, 74th Congress, 1st Session, Final Report on the Chain Store Investigation, Document no. 4. The Federal Trade Commission has also remarked, “The subject of ‘loss-leader selling’ seems to be surrounded by considerably more emotionalism and wishful thinking than actual information based on scientific study.” Report of the Federal Trade Commission on Resale Price Maintenance (1945), 258.Google Scholar

11 Seligman, E. R. A. and Love, R. A., Price Cutting and Price Maintenance (New York and London, 1932), 189.Google Scholar

12 Report of the Committee on Resale Price Maintenance, Cmd. 7696 (London, 1949), 14.Google Scholar

13 Italics added.