Court Lifts Ban on Minimum Pricing
In a five-to-four decision, the U.S. Supreme Court overturned a 96-year-old ruling that prohibited manufacturers from dictating the minimum prices retailers must charge for their goods. The court found that minimum-pricing requirements by manufacturers do not constitute an automatic violation of the Sherman Antitrust Act. Instead, such agreements must be judged on a case-by-case basis according to a “rule of reason” to assess their impact on competition.
The Supreme Court case was brought by Leegin Creative Leather Products, manufacturer of the Brighton accessories brand. Leegin had refused to sell its goods to any retailer that did not comply with its pricing policy, which mostly bans discount prices for Brighton products.
But Kay’s Kloset, a boutique in Flower Mound, Texas, put all of its Brighton products on sale. Leegin stopped selling to Kay’s Kloset, the store’s business suffered, and Kay’s parent company, PSKS, sued.
A jury, finding that Leegin’s actions were automatically a violation of the Sherman Act, awarded Kay’s Kloset $1.2 million, damages that were tripled because the actions violated antitrust laws. The U.S. Court of Appeals for the 5th Circuit upheld the ruling.
Five Supreme Court justices said that the new rule could lead to more competition and better service. The principle that past decisions should be left alone “does not compel our continued adherence” in this instance, Justice Anthony Kennedy wrote in the majority opinion. Respected authorities in the economics literature suggest that the long-standing decision “is inappropriate, and there is now widespread agreement” that price floors can help promote competition, Kennedy added.
In his dissent, Justice Stephen Breyer wrote, “The only safe predictions to make about today’s decision are that it will likely raise the price of goods at retail.”
Manufacturers praised the Court’s decision, while opponents argued that it will serve to raise prices and prevent smaller and upstart retailers, including Internet merchants, from being able to compete with established ones. Some analysts said that while the ruling shifts the power to price goods to brands and away from retailers, Wal-Mart Stores and other large chains still retained a lot of clout in negotiating with manufacturers.
The decision was the fourth antitrust ruling by the court in recent months. In each case, the court sided with defendants that were sued for anticompetitive conduct.
Coca-Cola names chief marketer
ATLANTA The Coca-Cola Company has appointed Joseph Tripodi to the position of chief marketing and commercial officer, reporting to president and coo Muhtar Kent. Most recently, Tripodi was the senior vp and chief marketing officer for Allstate Insurance Co., where he was responsible for the structure, strategy and execution of all of their marketing efforts.
In his role, Tripodi will lead a new function consisting of the combination of the company’s global marketing and commercial organizations. In addition to overseeing all aspects of marketing, he will be responsible for coordinating and leading the company’s strategic direction in commercial leadership.
Prior to joining Allstate in 2003, Tripodi was chief marketing officer for The Bank of New York. He served as chief marketing officer for Seagram Spirits & Wine Group from 1999 to 2002. From 1989 to 1998, he was the evp for global marketing, products and services for MasterCard International, where among other achievements he was a chief architect of the acclaimed “Priceless” campaign. Previously, he spent seven years with the Mobil Oil Corp., where he gained considerable international experience in roles of increasing responsibility in planning, marketing, business development and operations in New York, Paris, Hong Kong and Guam.
Whole Foods takes top spot on EPA list
WASHINGTON Whole Foods Market took the top spot this quarter on the U.S. Environmental Protection Agency’s Top 10 Retail Partners in its Green Power Partnership program. Other major retailers on the list include Kohl’s (2), Staples (4), Lowe’s (6) and Office Depot.
According to its profile on the EPA Web site, currently, Whole Foods Market is purchasing or generating 100% of its total national power load from green power sources.
The Top 10 Retail Partners in the Green Power Partnership is released quarterly and represents the largest completed annual green power purchases of all Retail Partners within the Green Power Partnership. According to the EPA, the combined green power purchases of these organizations amounts to an estimated 1.4 billion kilowatt-hours (kWh) annually, which is the equivalent amount of electricity needed to power more than 140,000 average American homes each year.