The Retail Price Maintenance Act was passed by Ted Heath along with VAT and others as a condition of joining the Common Market.
This Bill was specifically designed as a many-pronged attack on Britain’s Industrial and commercial strength, prompted by De Gaulle’s vindictive spite.
Prong one was to change British shopping habits away from quality and on to mass cheap and nasty consumables, complete with American approval, by using the retail sector which, if nothing else, knows how to take money and continue taking it.
Prong two was to weaken British manufacturing by strengthening retailing, which understand nothing but price. Responsibility and reward for quality and performance was put in the hands of everyone else but the manufacturer, and there was an unholy alliance of trading standards, bureaucrats and shopkeepers. This meant our manufacturers were faced with impossible competition from cheap copies and to this day, copying a successful product by colour and shape is normal and a disgraceful theft of brand and reputation. However, it is still a cheap and favourite tactic of supermarkets thieving the market.
Prong three was to shut out any escape for manufacturers by forming bureaucratic Trading Standards Laws which stopped manufacturers limiting the restrictions by re-organising themselves by stopping cartels, vertical integration and other devices. All this law has done is destroy British manufacturers and force foreign manufacturers to open chains of shops to sell their foreign goods in the UK where they faced no other competition.
Prong four was to include in this act a raft of other crowd-pleasing items, vaguely useful in slowing, but not stopping, the growth of monster over-large organisations with few curbs, a purpose they have singly failed to do.
Let’s just for a moment look at a small manufacturer growing bigger. Economists only think of four things for a firm, as does everybody else because they have no idea. These are land, labour, capital and organisation, although that one is not really approved of by anyone. But there is one far more important attributes which has been discounted by thickos and bureaucrats …The man who got it there! Without him, it’d just be lots of people looking around and banks with money to lend if only they could think of someone to lend it to.
How dare you tell this man this mish-mash! He’ll just walk away. Some idiotic retailer selling his products for less than it cost him to build? I don’t think so. It’s HIS idea, HIS hard work, HIS risks, HIS life. No I don’t think so.
We have killed off these people and now we’re suffering. Socialists are truly stupid.
The effect of repealing the Retail Price Maintenance Act will be:
- High Streets will be strengthened.
- Commercial control of internet will grow and become less aggressive; High Streets will slowly recover.
- Manufacturers will not allow you to mess with their marketing. Their ads will be cleaned up to suit them. Nobody else. Prices are a part of their marketing and price structures will start to reflect rationality.
- If makers cannot fix prices, ultimately they won’t play. That’s what we’re starting to see now.
- It should be obvious to everybody that this is a prime plank in the environment. Manufacturers know exactly what plastic goes in the packaging, they know how to make an everlasting light bulb and have done for 100 years. They know; you don’t.
Initially manufacturers will set selling prices to retailers of different kinds to maximise sales and profits.
For stores and internet retailers to get a level playing field, internet price plus delivery costs need to be the same as stores. But this gives them a much bigger margin, which is a problem when a firm has a store and a website. So you have to give a display and stocking discount. We all know that a cup of coffee costs 6p to serve but sells for £2, the difference being rent, rates, taxes, premises, insurance, R & M, breakages and perhaps 5 to 10% profit and other overheads.
If you could buy a coffee off the net you’d probably pay 60p, which is what you pay from a mobile van. So the store would have to be given a sensible discount or net retailers be charged more, which they can’t do now. But the manufacturers would not be able to compete with another manufacturer who only sells to the net retailer.
Whatever happens the manufacturer needs to protect his price and selling strategy to prevent price piracy and short termism.
However the manufacturer has many options that he can deploy, such as a new brand name, a new address, miscellaneous offers or promotions, whereas retailers have only price, guarantees, and, rather pathetically, delivery. This might continue to stabilise property prices and rents, and hence rates, via the high street.
Foreign companies such as Aldi and Lidl do this so why shouldn’t we? It would then remove the silliness of vertical integration seen in such companies as M & S.
Ignoring the complexities of economists, this law is silliness and a distortion of natural markets devised by Ted Heath, Charles de Gaulle and Sir Phillip Green, each for his own purposes. Supply and demand rules all.