Evening star., 1936-06-28
EFFECTS Of CHAIN
STORE REGULATION
|DEPENDONCOURTS
Retailers and Manufacturers
Uncertain on Robinson.
Patman Act.
INCREASED SELECTION
OF CUSTOMERS LIKELY
Manufacturers in This Way Will
Be Able to Steer Clear Of
Discrimination Ban.
BY J. G.. DONLEY.
II tcial Dispatch to The Star.

D. ". DoANAHAs
SI ecial Dispatch to The Star.
NEW YORK. June 27.-Retailers and
the manufacturers who sell to them
are all in a flutter over the Robinson
Patman act. Counsel for various trade
associations and for chain stores and
buying groups are dissecting the law
with due consideration for every semi
colon and comma.
But so far no one has arrived ct
any very definite conclusions as to how
the law will work out in operation,
and it seems likely that, as Is usual
with involved legislation, the way will
have to be plotted by court decisions.
Fundamentally, the law seems to be
"anti-chain legislation" designed to
prevent unfair discrimination against
independent retailers in the form Of
rebates. advertising allowances ana
more favorable prices.
At their recent convention the Ma
tional Retail Grocers' Association ap-
plauded the news that President
Roosevelt had signed the bill. Later
and also amid cheerS-a resolution was
adopted condemning Government COM
missaries. Few people know that the
Government itself operates q chain Of
stores, not only at military and naval
posts, but also aboard every battleship.
Deplores Low Prices.
One delegate at the retail grocers'
convention complained that the Gov
eminent commissaries sold at lower
prices than he had to pay at whole
sale. "Al the soldiers, sailors, vet
Grams and others eligible to buy 20
there and buy, not only for themselves,
but for all their friends and neigh
bors," he declared.
Reviewing the provisions of the act,
a bulletin issued by the National Retail
Dry Goods Association points out,
With the restrictions heretofore noted,
there Is nothing in this act which will
prevent quantity prices or quantity
discounts. providing that all customers
are granted equal prices and equal
discounts for equal quantities of mer-
chandise Of the same grade and
quality.
Should manufacturer find himself
unable to contract with all of his Gus
toners who desire to purchase given
quantities, because of limited facili-
ties OF production, such manufacturers
would be obliged to choose their own
customers and refrain from selling
those customers whose wants they
cannot supply for equal quantities.
There is no provision in the law
preventing a discrimination in terms
OF sale, but terms of sale cannot be
utilized as means of discrimination
in price -"
Regarded as Good Practice.
In the provisions outlined above,
the law does not go beyond what has
been regarded as good business prac-
tice by an increasing number of manu-
facturers in recent years. One effect,
1t Is felt will be tendency toward
selection of customers by many manu-
facturers.
In that way they can steer clear of
the involved anti-discrimination sec
tionS Of the bill. For instance, one
manufacturer may elect to sell only
to large retailers, such as chains or
groups of department stores; another
may elect to sell only to wholesalers
and jobbers, perhaps giving exclusive
distribution of its line to certain Sc
lected wholesalers; and another may
decide to sell only to small retailers.
THE courts have already upheld
the right of the manufacturer to re-
fuse to sell for whatever reason the
manufacturer himself might deem
justified" says the Dry Goods Asso-
citation Bulletin.
Confusion Feared.
Observers in the food trades say
that there seems to be agreement that
the purposes Of the new law are
sound, but present fears are that con-
fusion and political bureaucracy will
rule. The liveliest fear is that con-
siderable business volume will 60 by
the board pending the putting into
effect and clarification of the new law.
Gordon c. Corbaley, head of 'the
American Institute of Food Distribu-
ton, Inc, sees two desirable changes
in the near future. Irregular meth
DDS will be apprecibly brought under
control" he says, "and sellers will be
better able to protect themselves from
the demands Of the most voracious
buyers. The first change will speed
stability and continuity in markets
and in competition. The second
should keep prices in better balance"
(Copyright. 1857