Brands have another weapon to control their image, thanks to the U.S. Supreme Court.
The U.S. Supreme Court struck down a ban on minimum pricing agreements between manufacturers and retailers.
The decision shifts the balance of power to brands. Manufacturers now have the right to set minimum prices for their goods at retail.
The decision gives lower courts the leeway to determine, on a case-by-case basis, whether minimum pricing agreements are anticompetitive. Previously, such agreements were illegal on their face.
It will take time for the industry to feel out the boundaries of the new rule.
The ruling will give manufacturers a little more ammunition to pull their brands out of stores if the retailer starts discounting the line and hurting the image of the brand.
The ruling could make it easier for manufacturers to protect their most important assets, their brands. Manufacturers who want to maintain a certain brand image associated either with a certain price point or perhaps more importantly a certain retail experience, may now have latitude to set minimum retail price where they did not before.