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Thread: Minimum pricing

  1. #1
    Join Date
    Mar 2015
    Location
    Merrill, Wi, USA
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    4

    Minimum pricing

    Some of my investors want me to enforce a minimum price for our beers that are distributed locally to bars and restaurants. Can we do this? Is it a good idea?


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  2. #2
    Join Date
    Feb 2016
    Location
    Pasadena MD USA
    Posts
    24
    Okay so this is NOT sound legal advice and I'm NOT qualified to speak on this subject:

    Minimum pricing (aka "Minimum Resale Price Maintenance", "Price Fixing", or "Horizontal Price Restraint") is pretty much outlawed in the United States. This is under the Sherman Antitrust Act and it's vigorously enforced. There are a few exceptions - generally at the state level for specific products i.e. cigarettes.

    On the other hand, so-called "Vertical Price Restraint" such as MAP (minimum advertised pricing) and the use of limited/exclusive dealer areas can be used.

  3. #3
    Join Date
    May 2009
    Location
    Scottsdale, AZ
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    237
    As usual, more info is needed. Are you distributing or is there a distributor? Your PTW should take care of pricing. No one is going to work on smaller margins than normal. You can't set the retail price, but your price model should pretty much disctate where you will end up on the shelf. Figure 35% margin for distributor and 28-35 for the retailer.

  4. #4
    Join Date
    Mar 2015
    Location
    Merrill, Wi, USA
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    4
    Quote Originally Posted by BeerBred View Post
    As usual, more info is needed. Are you distributing or is there a distributor? Your PTW should take care of pricing. No one is going to work on smaller margins than normal. You can't set the retail price, but your price model should pretty much disctate where you will end up on the shelf. Figure 35% margin for distributor and 28-35 for the retailer.
    We are self distributing, to bars and restaurants only. Kegs only.


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  5. #5
    Join Date
    May 2009
    Location
    Scottsdale, AZ
    Posts
    237
    Do they mean a minimum price per pint at the bar?

  6. #6
    Join Date
    Mar 2015
    Location
    Merrill, Wi, USA
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    Quote Originally Posted by BeerBred View Post
    Do they mean a minimum price per pint at the bar?
    Yes. They are worried that people won't come to the brewery if they can get a pint cheaper somewhere else.


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  7. #7
    Join Date
    May 2009
    Location
    Scottsdale, AZ
    Posts
    237
    Sounds like your investors don't know squat about the business. Much like many new little breweries. How much are you pricing your kegs at, what size are they and how much is a pint of same brand in your tap? No bar is buying craft to sell it cheap. People come to your brewery to see the brewery. You def can't control your customers pricing, but the concern should not arise anyway.

    I could see an issue with your bars not buying if they perceive you as a threat to their business. I.e.; you're in the same neighborhood, serve door, have bands or otherwise open all night competing with them.

  8. #8
    Join Date
    Mar 2015
    Location
    Merrill, Wi, USA
    Posts
    4
    Quote Originally Posted by BeerBred View Post
    Do they mean a minimum price per pint at the bar?
    Yes. They are worried that people won't come to the brewery if they can get a pint cheaper somewhere else.


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