FTC advisory opinion digest

No. 202. D~finition of jobbers and wholesalers for functional pricing purposes.

The Commission issued an ach' isory op111lOn to nIl :1pplieant who ( 1) asked for a definition of the \yol'cls ;' jobber and ;" rholesaJel' ;; nil (:2) asked the Com111 ission s vil'\rs as to the propriety of :1 pl'opo~('c1 l'l'Ti~ion in price, lists.

In response the Commission stah'cl :

.-\.~ n \y()rking: rullo', one llli,g' l1t sUVIHISE' tllat, in a tllree 1pyel ~ystf'lll, \'.'1101esnlpr8 ;H' P clo~t'r to producer:,; and joblH:'rs Hl'(~ closer to rt'taiJers ill tlle di~trilH1tiol1 of llrodueE'l"s goods, Trnc1itionnllr, IH'odueer" sell to w1101es:1ler8 who iiell ;1t fl llhdwr pricE' to joblwrs \yI1O seii ..1t a lligher priC'e to retailers, The C'ontrolling element in ~- I)ur problem. ho\\"eYer, as in similn1' prulJ1f'1l1s ;lrisillg 111)(1E'1'tllE' nlllellclpd ClnytoJl -\('t, is \\'l1ptlH-'r 01' not res:!le (' llm)l\:'titinJ1 :letl1nlly exists ns bet\\'ePIl aDd among these \'CHious resellers rnt11er tIlall tIle Jl;1!lle~ they U~P to desC'l'ibe tlwmsdn's, If ill fact n 80-C'alled \Yll01esniE'r com11ej' 88 \\'it'h n so-called jobber in the redistribution of gnods, the cliffen'jJeE' in nflnw" is (If no ('onsE'Cjuenc' e: tlle fold of C'omlletition is, III Rlllie/'0id, 34:3 r, 8, 470, (10:)2) tlle Supreme COUl't ~tl't's8ed tholt :1d,lloll C'IJmlH:,tition in re~alp operoltions i~ r1~'cisiYp rntlwl' tbnn JIllllH'nclatul'P nllcl aplIl'nH'c1 tllE' Commission di~l'Pgl1rd of "ambiguous Inlw1~ , \,l1ic'l1 mi;.:'I11: 11(:' usel1 to donI;: c1isC"ril1linl1 tor;l di~counts to fayorec1 eustomers, \'1,'11;: t you 1I1a11 . ns we understand it. is to sell ;lour mic1lllemen, ,Yllether w1)(11esalers " or "joblwrs, " nt OJW I1J'iC't' , wllile selling ct'ltain selec'tec1 l'dailIOll's at ;1 lligher price, In tlle C'irC'umstanC'es ;Ion pre~ent, ~' oU ma~- 111'oper1;: do this Ill'oYich'cl tlle \\,11010s;-;,ler8 " ;111(1 "jol'JJ'lers " :ire fnnc,ti()lJin~~: nt. rIle SnlllE' clistrilmtillJl l('\'el nnd nre not tlwm~el\'es en:.m~:E'tl in retail opt'rnrioJls (' OIl1PE'titiH' \\'itll tl1p seleded I'l'tflilers, (FiJe Xo. (;83 700:2 1't'h' l1secl ~Ial'. 1+ , IDfj8,