I read a translation of the article but I’m confused. Is it that the manufacturers are insisting on a minimum price that’s the problem or that the retailers are going below the minimum price or both? I would love someone to explain it to me. Because I thought recommended retail prices are perfectly legal and standard practice. It’s up to the retailer as to whether they cut their own profits to make a sale, right? As I say, I’m confused! Help!
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Yes indeed.
Prices should not be imposed by the manufacturer, though, according to the law.
Apparently both Yamaha and Roland have surveillance apps to monitor the prices on each retailer.
Anyway, even if I can see why it’s good for the customer to have low prices, in practice this was rather maintaining the little businesses, IMO.
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Ah, gotcha. So manufacturers can say, we recommend you sell at this price, which will make you X profit, but they cannot demand that something is sold at a certain price. Thanks!
price fixing is forbidden in germany. the cartel office monitors this.
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I think there’s some grey area here - but it’s also pretty straight forward in terms of antitrust laws.
as a former watch addict, in the US, I recall a number of my own conversations with smaller watch retailers (as well as watching a few YouTube rants) about discounting.
Rolex, for example, (I don’t have one), will pull its entire line from a store if they learn that the watches are being discounted below MSRP. Timex (who do have some expensive watches), are said to do the same. I wanna say Victorinox also plays this game. Even so, I was able to get discounts on the down low from time to time (watch prices are total bullish*t).
I make watches or synths, you want to sell them at your store. I tell you what the price is, and you may or may not discount it. But you must publish what the discount is (usually) to the customer. (you don’t have to tell other customers about every discount you give).
Where is gets dicey is when two “competing” stores make price-setting agreements. It’s anticompetitive. Same if the manufacturer participate in those agreements.
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Yep:
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Even in German the article is a bit confusing… one aspect clearly is that the three producers sought to enforce their pricing recommendations by monitoring retail prices and putting pressure (e.g. via sales conditions, availability of goods) on retailers they found selling for less. Regarding Thomann and MusicStore, the issue --as far as I understand it – is that they colluded with the producers by signalling competitors who undercut prices (apparently in an effort to atone for their own bundle pricing practices), and also among themselves by jointly timing increases of sales prices demanded by the producers…
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I think a critical issue here is that the two retailers and also the three producers (Korg, Yamaha, Fender) are quite dominant in their markets. Otherwise it would be difficult to argue that market mechanisms were influenced and consumers were harmed in the process.
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Had this problem when I worked as a sales manager for a skate company. There would be the odd online store selling our products at stupid low prices, the tiny little shops would call me up and complain " no one will buy from me, I cant compete with that price! I have bills to pay" which is fair enough.
RRPs exist so that everyone gets a fair go at making a profit, which is what retail is all about.
You cant force shops to sell at the recommended price, but you can be out of stock when they place an order 
Little shops that play fair call up to place an order, sure dude, we got all that stuff, ready to go.
Problem solved.
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Oh well that’s a little fish. Look at Big Pharma! Big tech! Yes Apple, Microsoft, Amazon, Google, Oracle, IBM, HP, Pfizer, Monsanto, Bayer, Boeing, Airbus…I mean you!
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I don’t think you’ll find many who think the rest should be allowed anticompetitive action either.
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didn’t this just happen recently with some other musical inst manufacturer?
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How do you know this?
Page 4 of the published report of the German federal anti-trust authority states that vertical and horizontal price fixing by other producers/retailers was not pursued in their investigation because they did not have enough weight in the market (“Marktbedeutung”).
B11-31-19_B11-33-19 (2).pdf (90.9 KB)
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I think that’s fine because price fixing is against the law and anti-consumer. I also dont think that these manufacturers are dictating prices out of altruistic reasons to protect small businesses. That’s just as naive as assuming that Uli Behringer is cloning synths to enable poor musicians (because he’s not, he just wants to move units and make a profit)
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Well, I wouldn’t be so sure: I have seen a Fender rep in a local store more than once.
I mean, of course it’s not altruism, but it might be the goal anyway.
After all, what is exactly the consequence of such practice for small businesses?
This is all a signal of what’s coming down the line- the end of retailers.
MAP pricing (US approach) stops big box shifter retailers from undermining a brand and undercutting other retailers. This shifts your focus away from buying purely on price and allows customer service/availability to play a part. In theory.
Also important to remember that MAP is minimum ADVERTISED price, so retailers can still do individual deals.
IMO, this is the best all round approach.
For some reason it was given the negative connotation of ‘Price Fixing’ by the EU.
As a manufacturer/distributor you can ‘suggest’ SRP, but not insist on it.
So we get situations where it’s a ‘race to the bottom’ on prices that eliminates any smaller retailers.
BS.
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Yeah, that salary stuff where the Big 5 kept salaries down for programmers as well, right?
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I thought that was more about noncompete collusion, but i could be thinking of another industry maladaption.