Manufacturers and manufacturers’ reps hate it just as much as reputable dealers when competitors do stupid things with pricing and undercut everyone’s margins. This has long been a problem in the E&S market. The rise of the Internet has aggravated the problem.

E&S manufacturers are beginning to employ some tools to help dealers with the pricing issue. These strategies were a major topic at last week’s annual conference of the Manufacturers’ Agents Association for the Foodservice Industry, in San Antonio.

A number of major manufacturers have recently initiated “Minimum Advertised Price” and even more stringent “Minimum Resale Price” policies. MAP policies dictate the minimum price at which a dealer can advertise a given product. Sometime these policies affect only prices advertised on the Internet, sometimes advertising in any medium.

Minimum resale-price policies go further. Such policies set a floor under which dealers are not allowed to sell product. These policies have teeth. Break the MAP rules and dealers can lose promotional allowances, rebates and other considerations. Sell under MRP policies and dealers risk losing the line entirely.

Among the manufacturers with current MAP policies are Middleby, ITW, Hoshizaki, Globe, Alto-Shaam, and Turbo Air. Manitowoc has announced that most of its brands will be covered by MAP policies beginning Jan. 1, 2011. ITW’s Hobart, Traulsen and Vulcan brands and Hatco have minimum resale-price policies. In Hatco’s case, dealers cannot sell anyone for less than 45% off published list prices.

Make no mistake. These policies are perfectly legal. Anti-trust law over the past two decades has ruled in favor of such policies, so long as certain conditions are met.

I will guarantee you more manufacturers will implement MAP and MRP policies. It’s not just a matter of protecting their margins. They are trying to protect the margins of full-service dealers who perform the services operators and everyone in the channels need and want. I urge you to support your manufacturer partners with such programs and suggest those without such policies implement them.


Robin Ashton



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