Winery setting Prices, please respond

[ddf68]

Roberto, put me down for I think she's crazy, but even the devil needs an advocate, so here goes:

Antitrust lawyers call this a "retail price maintenance scheme". Retail price maintenance schemes generally do not violate federal antitrust laws. The theory seems to be that the manufacturer has a legitimate interest in selling only through retailers with a large enough margin to provide good service and support--you see this, for example, in the ski industry. You could make the same argument here--bigger margins make it more likely that you'll have more knowledgeable salespeople, better storage conditions, less likelihood that the shop will give customers a hard time returning a bad bottle, etc. All of which adds up to a greater likelihood that customer will like "Attorney Zin" and buy more, tell their friends, etc.

I think she's crazy because it seems to me that these concerns are more applicable to a (semi) durable good like skis which the average purchaser will be stuck with for at least a couple of years than for a consumable which, like as not, will be gone in a week. Also, I imagine that getting the desired result is a lot easier where you've got ski retailers with only few brands as opposed to the hundreds of brands that a wine retailer will carry.

ddf

[This message has been edited by ddf68 (edited 06-27-2001).]

[This message has been edited by ddf68 (edited 06-27-2001).]