Fair-trade Agreement (Noun)
Meaning
An agreement (illegal in the United States) between the manufacturer of a trademarked item of merchandise and its retail distributors to sell the item at a price at or above the price set by the manufacturer.
Classification
Nouns denoting communicative processes and contents.
Examples
- A fair-trade_agreement banned by federal law restricts the freedom of retailers to set their own prices and undermines market competition.
- Companies may also engage in a fair-trade_agreement with authorized dealers and end-users to set the minimum resale price.
- Under the fair-trade_agreement, minimum resale prices must be adhered to, and retailers cannot sell below that point.
- To protect smaller merchants who generally may charge less and keep full payment to and for them, manufacturers' fair-trade_agreements may prohibit distributors from lowering product prices and thereby require larger corporations to stop the undercutting.
- Laws were implemented at both a state and federal level to outlaw the use of a fair-trade_agreement as a sales practice to make sure that manufacturers must keep their products' prices open to competing and price reductions.