Issue link: http://winesandvines.uberflip.com/i/246577
WINE M AR K E T ING trigger the producer 's refusal to deal with that retailer.) We also will not make available to our distributors any marketing funds or promotional programs for the purpose of promoting products that are priced below the price(s) set forth in this policy. We have determined this policy is necessary in the competitive marketplace for the following reasons: • Pricing our products below our minimum resale price (or cost) is a predatory practice that is harmful to our brand image and undermines our marketing efforts with respect to our brand(s). • Pricing our products below our minimum resale price (or cost) causes a decrease in sales of our products by other retailers and wholesalers that cannot match such predatory pricing. • Pricing our products below our minimum resale price (or cost) is an unfair business practice that threatens to decrease competition in the marketplace, to the detriment of our customers. This minimum resale policy is non negotiable. You are free to decide whether to follow this policy or not. This policy does not constitute an agreement between us and you, and we are not seeking a response from you. This policy applies to all retailers that sell our products throughout the United States. Resale price policy in a three-tier system An obvious stumbling block to implementing such a policy is what to do about the fact that in almost all cases it is the distributor who sells to the retailer, not the producer. (The exception is when a winery selling within its own state elects to bypass the distributor and sell directly to retailers, in which case the resale policy outlined above may be used.) Wouldn't any agreement between producer and distributor to cut off any retailer that violated the price policy run afoul of these same antitrust laws? If that is the case, and no producer and distributor enter into such an agreement, then what is the distributor's independent incentive to decide not to sell to the retailer? Our solution is to make clear to distributors that no marketing or promotional funds, bill-backs or depletion allowances will be provided for the purpose of promoting the products in retail accounts that price products below the producer's announced minimum price (or that otherwise engage in predatory or unfair practices outlined in the producer's policy). Note this must be presented as the producer's independent policy and cannot be presented as an opportunity to negotiate with the distributor. The producer must further be willing to follow through on this policy and not negotiate or make allowances with a distributor for a particular promotional program or important retailer. The producer can take this a step further by including a statement in its agreements (or terms and conditions of sale on its invoices) with distributors that acknowledges the producer's policy, such as: "Supplier has established a resale policy for its products to protect the brand image and value by refusing to deal with accounts that engage in practices that harm the brand, that are anti-competitive or that violate the law of any state. Supplier's resale policy is set forth below (or, is set forth as Exhibit 00 to this agreement)." The suggested resale policy provided above (with slightly revised wording to fit the context) can then be included directly in the terms and conditions of sale or added as an exhibit to the distribution agreement. Producers that are particularly riskaverse or that are dealing with a distributor in a state that has expressly elected ERROIR Master the art of winemaking Learn the scientifc framework for successful winemaking with UC Davis Extension's internationally renowned online winemaking certifcate program. The program is designed to provide you with: • Unparalleledlearningfromworld-classinstructors • Academictheoryandreal-world,commercialapplication • Criticalnetworkingopportunities • Convenientandfexibleonlinelearning Visitourwebsiteandstartpursuingyourpassiontoday. extension.ucdavis.edu/winemakingcert See what our students have accomplished. pr actica l win ery & vin eya r d F EB RUARY 20 14 65