Dissolution due to deviation from recommended prices: unacceptable under competition law

An important statement was recently made with regard to margin management and ditto pricing policy.

A manufacturer of mattresses is confronted with a dealer who, on his own initiative, offers 20% internet discounts on the recommended retail price of the mattress manufacturer in question.
Subsequently, immediately after the launch of the promotion on this website, a large number of dealers put pressure on the mattress manufacturer to end the dealer’s conduct in question. The mattress manufacturer has always taken the position that it does not care in itself to what extent dealers give consumers discounts, but that it cannot afford that in the future major dealers would no longer want to sell its products because they cannot live with the hefty discount practices of another dealer.

Since the mattress manufacturer even terminates the dealer agreement for this specific reason, there is an extremely far-reaching sanction for non-compliance with the recommended consumer prices. This conduct is contrary to competition law. After all, the bottom line is that the entrepreneur who does not adhere to the recommended prices is excluded in the most far-reaching way. After all, there is no discussion as to whether or not there is indirect soft incentive to maintain a certain consumer price and/or whether or not this course of action is fully justified. No, there will be a flat termination, specifically for that reason and that is unacceptable under competition law.

It is good that the Court of Appeal has understood this state of affairs and has subsequently declared the termination of the cooperation relationship null and void.

Ludwig & Van Dam franchise attorneys, franchise legal advice