Cigar Prices on the RISE?

[Admin]

http://www.cigarcyclopedia.com/news/news.php?c=journal&id=879

Supreme Court reverses precedent on retail price fixing!
Announced on Thursday, June 28, the decision “ by a 5-4 vote “ overturned a 1911 decision in Dr. Miles Medical Co. vs. John D. Park & Sons Co., (220 U.S. 373) in which the Court held that it is illegal for a manufacturer to agree with its distributor to set the minimum price the distributor can charge for the manufacturer's goods.

So what does this mean?
Subject to unreasonable abuse “ such as every cigar manufacturer and distributor adopting the practice “ the decision will allow cigar makers to set minimum retail prices below which their brands and shapes cannot be sold. It may begin the level the field between the large national discount shops such as Famous Smoke Shop, J-R Cigars, Mikes Cigars and many others and retailers, who have long decried the ability of these large enterprises to deeply discount popular brands while brick-and-mortar retailers (which all three of the above are also, by the way) maintain suggested retail prices.

[discdog]

I don't see this changing much. Other than the increased price to the consumer.

The court says the manufacterer's can set minimum prices, it didn't say they had to be the same for everyone. Nor did they say that all etailer must collect sales/excise taxes. So the advantage still goes to the big boys. Like I said, the only ones not benefiting from this is the consumer.

[Admin]

Some companies already do it anyways.   For instance, one cannot advertise Cusano cigars below their set prices.   That does not mean that you cannot sell them at a lower price, but the advertised price must be within their limits or you cannot buy them to resell.

While the manufacturer always had the "power" to refuse sales to anyone reselling below their set prices, the new ruling makes it easier to enforce.

If the main manufacturers would get together and enforce it across the board, then the end consumer is going to end up paying the price.   For example, someone like General Cigar who makes many, many fine cigar brands could now decide to restrict discounting of their cigars.

In the big picture of things, I wonder how Wal-mart and other discount stores reacted to the ruling.   As it applies to all products, not just cigars.

I personally don't feel its fair that any business owner has to have strict price restrictions.   Some companies operate very efficiently with less overhead and can sell at a better price.   Everyone selling the same item for the same price defeats the term of "shopping" as people shop to find great deals.  Service comes into play as well, but overall...its the price that most look at first.

I think it will be overturned again soon as consumers are not going to tolerate retail price fixing and retailers certainly need to be competitive to draw customers.