would it be considered price fixing if... (1 Viewer)

[OL_O]

a business eg steggles started to sell their chickens cheaper to kfc than to other competitors, and if it were to be considered price fixing would both companies share equal blame?

 

[BLIT2014]

a business eg steggles started to sell their chickens cheaper to kfc than to other competitors, and if it were to be considered price fixing would both companies share equal blame?

That's not price fixing tho?

 

[OL_O]

That's not price fixing tho?

i guess i worded it wrong i meant in the sense that since steggles is negotiating terms with kfc behind closed doors it allowes kfc to reduce prices and competition. or is it still not?

 

[BLIT2014]

i guess i worded it wrong i meant in the sense that since steggles is negotiating terms with kfc behind closed doors it allows kfc to reduce prices and competition. or is it still not?

Well your right in the fact KFC will be able to have cheaper inputs,i.e chicken which enables them to reduce prices and then KFC would be more competitive.

 

[Crisium]

What you're talking about is price discrimination

And yes the example you stated would be considered price discrimination because of product differentiation within the same market

Price discrimination is also used when the stores are geographically separated

It is considered as an unethical practice, however there are some (but very few) situations where price discrimination is allowed

EDIT:

Just realised how strange this situation was ...

I doubt the big guns such as KFC would share the same suppliers as other big guns in the same market

It's nonetheless still considered price discrimination. The supplier isn't allowed to give the business cheaper prices because it pays its bills on time, etc. There is no excuse.

As for the blame part, the supplier would get screwed, the ACCC would look into it and fines, imprisonment, etc. will ensue.

 

[BLIT2014]

What you're talking about is price discrimination

And yes the example you stated would be considered price discrimination because of product differentiation within the same market

Price discrimination is also used when the stores are geographically separated

It is considered as an unethical practice, however there are some (but very few) situations where price discrimination is allowed

What Crisium said.