Proposed trade associat.ion discussion seeking firm price guarantees from suppliers The Commission was…
72 F.T.C. 1042 · Aug. 24, 1967 · Digest No. 137
source volume section (72 F.T.C. 1042)
Text is machine-OCR of the printed volume and may contain errors. Advisory opinions are the Commission's views on proposed conduct, not binding orders.
No. 137. Proposed trade associat.ion discussion seeking firm price guarantees from suppliers The Commission was requested to render an advisory opinion with respect t.o the legality of a user s trade association discussing and seeking a "guarantee that a quoted price wil remain firm for a definite number of days" from individual suppliers or from their national association.
It was represented t.hat the product constitutes about 30 percent ADVISORY OPINION DIGESTS 1043 of the cost of doing business and that while some users buy direct others purchase from intermediate suppliers. Regardless of the supply source, product suppliers change prices without notice and wil not guarantee firm prices unless the purchase contract calls for a large quantity of the product. As users' customers demand firm price quotations on their needs and because of the normal time lapse between a quotation and actual product purchase, an interim price increase by producers results in a lessening of the users' profit. The Association added that there is no agreement not to do business with those producers who decline to guarantee firm prices, but that individual users wil continue to bargain for concessions as they do at present.
The Commission advised that it could neither approve nor sanction the proposed industry discussions. Though such discussion might be motivated by a purpose to remove evils affecting the industry, it appears to go further than is reasonably necessary to accomplish the desired result. Even if the discussions were accompanied by disclaimers, there is implicit therein too grave a danger that it would serve as advice whereby the concerted power of members of the local association, and even of the national association, might be brought to bear to coerce the producers, or their association, to conform pricing policies to the standard desired or at the very least as an invitation to enter into agreements among themselves to do so. (File o. 683 7022, released Aug. 24 1967.