Resale Prices Act

Abolition of Resale Price Maintenance.

 

Resale Price Maintenance (RPM) in the UK allowed manufacturers and suppliers to set the retail price of their goods. The effect of this was to prevent large retailers, who had greater buying power, from using their economies of scale to undercut the prices charged by small shops.

 

After Tesco opened a major new store in Leicester in December 1961, it affirmed its commitment to opening further discount stores, and The Grocer reported that "…Tesco (is)… a sort of St George who is going to kill this awful dragon of RPM”.  The photograph on the right is taken from "Counter Revolution: The Tesco Story” showing a scene outside the store at the time.

 

Supermarket chains lobbied hard for the removal of RPM, and fought legal actions, or the threat of them, against manufacturers such as Bex Bissell and Kayser Bondor.

 

However Edward Heath, President of the Board of Trade, saw that the abolition of RPM would help to lower the cost of living, and in January 1964 the Cabinet approved his proposal.

 

In July 1964 the Resale Prices Act came into law, and this made resale price agreements against the public interest unless proven otherwise.

 

This act is seen as an critical turning point in the growth of the major supermarket chains in the UK.