The Retail Price Maintenance Act – A European Peculiarity

by Petra Woodfull-HarrisRPMDA15_092 The Retail Price Maintenance Act is a law that on the one hand obliges publishers to determine and publish retail prices for all books and sheet music, and that on the other hand obliges retailers to sell these publications at the published prices only. In several countries in Europe the state restricts free market economy in such a way including France, Austria and Germany. The Act is based on the premise that books are cultural assets and therefore have a special status which needs to be protected. There are a few exceptions: damaged copies can be sold at lower prices, and if a store is to be closed, books can be sold at lower prices during final sales. Also publishers may grant discounts to authors and employees of other publishers who are ordering books for their own private use. Publishers may sell books to teachers at a discount for the purpose of having them trialed. Under certain circumstances discounts between 5 and 10% may be granted to libraries, and in addition orders of large quantities for classroom teaching can be supplied at a discount. In France and Austria retailers are permitted to generally grant discounts of up to 5%; the German law is stricter here. Supporters of the Retail Price Maintenance Act believe that its effect is twofold: By setting a fixed price, books that do not sell in large quantities but nevertheless might be culturally valuable become profitable; this enables retailers to stock a wide range of product which is not only limited to bestsellers. The assumption is that the profits derived from selling bestsellers at full price will enable subsidization of culturally valuable, but less popular product. And secondly, by eliminating price competition, smaller businesses, that otherwise might not be able to compete with larger companies and discounters, are protected. The result is a larger number of booksellers/sheet music stores in the market place. It is assumed that with more companies selling, more product is sold. In Germany the Retail Price Maintenance Act has a long history and goes back to the year 1888. When the European Union came into being a new challenge arose because according to European law restraints of competition between member states are not permissible. Germany whose economy is traditionally based on small and medium-sized businesses fought hard to maintain the Retail Price Maintenance Act. By the way, in Germany the Retail Price Maintenance Act has also been extended to e-books as it also covers product that reproduces or substitutes books and sheet music. However, it can be observed that also in countries which have a Retail Price Maintenance Act a concentration on large book chains has taken place. And furthermore, even though buying books and sheet music through the internet does not afford a price advantage – on the contrary, it is sometimes more expensive because of shipping charges – consumers increasingly buy through the internet. And what about the publishers? Would they sell more copies if retailers would be able to grant discounts? Food for thought …

2 thoughts on “The Retail Price Maintenance Act – A European Peculiarity

  1. Hello Petra and RPMDA:
    Re RPMA (curious similarity?): Seems that the LACK of this policy in US has driven down the sheet music biz. HAL and a few others have, by virtue of their pricing and stocking, caused many smaller shops to discontinue much, or ALL stocking of more specialized
    product, or indeed forced smaller shops, that were dedicated to more serious stuff, out of business.
    For years, at RPMDA, I heard lectures and talk on how to restrict less ‘popular’ material. So, now, RPMDA has less relevance to serious music publishing.
    don@trillmusic.com

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