Pricing Policy Terms to Know


Minimum Advertised Price (MAP): The lowest price distributors are allowed to advertise for a product. It defines what constitutes as “advertising” and controls what pricing shows up in print, online, or in an email blast, not what the product will necessarily be sold for at checkout.


Unilateral Minimum Resale Price (UMRP): A manufacturer sets a minimum resale price on its own and may refuse to supply distributors who sell below that threshold. There’s no negotiation and the UMRP policy is not included in written agreements with distributors. It is a take-it-or-leave-it policy.


Minimum Resale Price (MRP): A required minimum selling price. Unlike MAP, this would apply to the actual transaction price, not just the advertised one. If applied through an agreement with a distributor, the MRP would likely be flatly illegal in Maryland, California, New York, and potentially other states.


Manufacturer’s Suggested Retail Price (MSRP): The price a manufacturer recommends for the resale of a given product. It is not enforceable.


Net Price: The actual price paid after taxes, fees, discounts, rebates, and other adjustments are factored in.


List Price: The published starting price before discounts or negotiations.


GSA Pricing Requirements: Rules that apply when selling to the federal government through U.S. General Services Administration (GSA) contracts. Suppliers must ensure government pricing tracks appropriately with their commercial pricing under the terms of the contract.


42 FEDA News & Views


“Antitrust issues may arise if a manufacturer agrees with competing manufacturers to impose price or non- price restraints up or down the supply chain, or if suppliers or dealers act together to induce a manufacturer to implement such restraints.”


— Federal Trade Commission


can also adopt and announce a unilateral resale pricing policy, can limit dealer territories, and can decide which distributors it will and will not supply, so long as these decisions are made by the manufacturer independently and not in conjunction with other manufacturers. “Horizontal” pricing agreements


work differently and aren’t as common in the foodservice equipment space. They involve competitors at the same level agreeing on prices or acting together to pressure a supplier, and federal law generally prohibits coordination between horizontal competitors as an antitrust violation, according to the FTC.


Making Critical Distinctions Picture this: A competitor advertises


a combi oven line below minimum advertised price (MAP). Customers start asking their distributor to price-match, cutting into already thin margins. Wasn’t this what the manufacturer’s policy was intended to prevent? A distributor might be tempted to call the manufacturer and say something like, “Hey, we need you to do something about this.” That’s the moment federal antitrust law starts to kick in, though the complaint itself isn’t the problem. What really matters is whether the manufacturer enforcing the MAP policy acted on its own or together with a group of complaining dealers (which might be horizontal competitors).


In evaluating these situations, the FTC draws a “critical distinction” between a unilateral decision and a collective agreement among competitors. The line gets crossed when distributors coordinate or pressure the manufacturer together. Federal law treats that as illegal horizontal conduct. As the FTC explains, “Antitrust issues may arise if a manufacturer agrees with competing manufacturers to impose price or non-price restraints up or down the supply chain, or if suppliers or dealers act together to induce a manufacturer to implement such restraints.”


When an antitrust violation is found to have occurred, the consequences can be serious at both the state and federal levels. Organizations that coordinate pricing can face lengthy and expensive antitrust investigations, civil lawsuits seeking treble damages (three times the actual loss), and criminal charges with fines and jail time.


Distributors who talk among themselves about pricing or jointly push a manufacturer can trigger severe penalties. The safest play is for distributors to set their own prices, follow manufacturer policies, and avoid coordinating with competitors. If an issue arises, report the violation to the manufacturer and let them handle it from there.


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