Resale Price Maintenance in Australia: What You Can and Can't Do

Setting your prices is a big part of running a profitable business. But if you supply goods to retailers or resellers, or you’re part of a franchise or distribution network, there are strict rules around how you influence downstream pricing in Australia.

Those rules sit under “resale price maintenance” (RPM). It’s a competition law area that catches many well-meaning suppliers out - often through a single email or clause that goes too far.

In this guide, we’ll explain what RPM is, when it’s illegal, common traps we see in distribution and franchise agreements, and practical ways to achieve consistent brand pricing without breaching the law. We’ll also share simple steps you can take to train your team and tidy up your contracts so you can grow with confidence.

What Is Resale Price Maintenance?

Resale price maintenance is when a supplier tries to control the price at which an independent retailer or reseller sells the supplier’s goods or services.

It usually looks like a supplier:

• Setting a minimum price or minimum discounting level the retailer must not go below.
• Threatening to stop supply if the retailer discounts below a certain price.
• Withholding supply because the retailer sold below a set price.
• Offering rebates, payments or other benefits on the condition the retailer sticks to a minimum price.
• Trying to enforce a “price parity” clause that effectively prevents the retailer from discounting anywhere.

In Australia, these behaviours are generally prohibited per se - meaning they are unlawful regardless of their effect on competition.

Is Resale Price Maintenance Illegal In Australia?

Yes - in most cases. Under the Competition and Consumer Act, RPM is a strict prohibition. You don’t need to show harm to competition for it to be unlawful.

That said, there are some important nuances:

• You can publish a recommended retail price (RRP), provided you don’t pressure or induce resellers to comply.
• Genuine agency models (where the “agent” sells on behalf of the supplier and doesn’t own the goods) are treated differently, because the agent isn’t an independent reseller. The details matter - simply calling someone an “agent” doesn’t make it so.
• There’s a formal notification pathway to the ACCC that can grant immunity if public benefit outweighs detriment. This is uncommon for small businesses and needs careful advice.

Small wording differences and everyday sales conversations can tip a lawful RRP into unlawful RPM. For example, “We expect you to hold the $89 price - if you keep discounting, we’ll have to reconsider your allocation” is almost certainly a problem.

What’s Allowed Versus Not Allowed?

Generally Allowed

• Recommending a price with clear “recommended” labelling and no threats or incentives to enforce it.
• Setting your own wholesale price and volume discounts for your resellers.
• Using non-price criteria for selective distribution (e.g. store presentation, staff training, merchandising standards) - as long as they aren’t backdoor price controls.
• Protecting your brand with consistent marketing requirements and accurate pricing displays in line with advertised price laws.

Generally Not Allowed

• Minimum resale prices (or “you must not sell below $X”).
• Minimum advertised prices that effectively operate as minimum resale prices (e.g. “you can sell lower at checkout but must never advertise below $X”).
• Threats, pressure or supply restrictions tied to a retailer’s discounting.
• Offering benefits or rebates conditional on not discounting below a threshold.

If your agreements or emails look like you’re trying to “police” downstream pricing, that’s a red flag. It’s safer to focus on wholesale terms, brand standards and lawful recommended pricing.

Common RPM Traps In Distribution, Reseller And Franchise Networks

We often see RPM issues pop up in routine documents and everyday communications. Watch out for these:

• Price floors in a Distribution Agreement or Reseller Agreement - even if framed as “policy”.
• “You must adhere to RRP” clauses in a Franchise Agreement or operations manual.
• Emails to retailers warning that supply will be reviewed or cut if they discount below a certain price.
• Rebate schemes that pay more only if the retailer never drops below a specified price.
• Minimum advertised price (MAP) policies that, in practice, operate like minimum resale prices.
• Templates that auto-fill “not below $X” language into promotional approvals or marketing sign-offs.

Pricing consistency can be a legitimate brand goal. But when it’s achieved through downstream price control, it becomes risky. Instead, design your commercial levers around wholesale terms, non-price standards and collaborative promotions.

How To Achieve Price Consistency Without RPM

Here are practical, lawful tools to consider if you want to support consistent pricing while avoiding RPM:

1) Use Wholesale And Promotional Levers

• Set transparent wholesale prices and volume tiers that work commercially for you and your resellers.
• Offer time-limited promotional support (e.g. co-op marketing funds) that doesn’t condition benefits on staying above a minimum resale price.
• Agree campaign windows and recommended price points in writing, but avoid any penalty or supply threat for discounting.

2) Tighten Brand And Merchandising Standards

• Require minimum staffing, product knowledge, displays and online presentation standards - these protect brand value without dictating price.
• Include lawful approval processes for marketing materials that ensure accuracy under the Australian Consumer Law (ACL), supported by a clear Warranties Against Defects Policy where relevant.

3) Recommend (Don’t Enforce) RRP

• Publish RRP lists clearly marked “recommended.”
• Train your team to avoid pressure statements. Stick to “recommended” language and do not hint at supply consequences.
• Steer clear of “minimum advertised price” rules - they can quickly drift into RPM territory.

4) Consider Genuine Agency For Specific Channels

• In a true agency model, the agent sells on your behalf, at your price, and you bear key commercial risks.
• This structure must be genuine - the legal and commercial substance needs to match the label. Get advice before relying on this approach.

Check Your Contracts And Policies For RPM Risk

Before the next product launch or seasonal promotion, it’s wise to review your documents and internal playbook. Focus on:

• Distribution/Reseller Agreements: Remove price control clauses and replace them with lawful brand, service and merchandising requirements. If you don’t already have tailored templates, start with a compliant Distribution Agreement and Reseller Agreement.
• Franchise Documentation: Ensure pricing direction is positioned as recommended only, and that your Franchise Agreement and manuals don’t stray into enforcement territory.
• Terms Of Trade With Retail Partners: Use clear commercial terms (payment, delivery, ordering, marketing windows) rather than minimum resale price commitments. If you need new terms, a tailored Terms of Trade template helps.
• Marketing And Promotions Policy: Align brand approvals with the ACL’s rules against misleading conduct, including accuracy in comparative pricing and discounts, consistent with section 18 and section 29.
• Staff Training: Give sales and account teams a simple “what to say/what not to say” guide to avoid accidental RPM in emails or calls.

What To Do If A Retailer’s Discounting Is Hurting Your Brand?

Heavy discounting can be frustrating - especially if it upsets other resellers. There are still lawful, practical steps you can take:

• Review whether the discounting is linked to misleading advertising or drip pricing issues under the ACL. Your rights under the ACL, including potential remedies under section 236 (damages), may be relevant if there is misleading conduct.
• Revisit your wholesale and promotional structure. If your wholesale price leaves no margin, resellers may feel forced to discount and churn volume.
• Use non-price performance criteria (service levels, merchandising) to maintain brand value and, if necessary, to rationally allocate limited stock.
• Offer coordinated promotions that lift everyone - e.g. supplier-funded bundles or gift-with-purchase - rather than price floors.
• Provide an RRP guide and marketing assets. Many retailers will prefer to align if you make it easy and commercially sensible.

It’s also worth reminding your network that RPM is a legal line neither party can cross. That reassurance can de-escalate retailer complaints about a competitor “selling too low.”

Frequently Asked Questions About RPM

Can I Have Different Wholesale Prices For Different Retailers?

Yes, provided you’re not using wholesale pricing to indirectly enforce a minimum resale price. Volume-based discounts or commercial terms tailored to a retailer’s scale or service levels are common and lawful.

Is A Minimum Advertised Price (MAP) Policy Safe?

Not necessarily. If a MAP operates in practice like a minimum resale price (for example, it bans discounting in online ads and then you pressure retailers who promote below that), it may be caught as RPM. Extreme caution is needed.

What About Online Marketplaces And Price Parity Clauses?

Clauses that prevent a retailer from offering a lower price on other channels can raise RPM concerns and broader competition issues. Get advice before deploying parity clauses.

Can I Stop Supplying A Retailer Who Constantly Discounts?

You can choose who you supply, but if your refusal to supply is because the retailer did not comply with a minimum price or because they discounted, that refusal can itself be RPM. The reason and the surrounding communications matter.

Do I Need Special Legal Documents To Manage This Risk?

Clear, tailored contracts help. Many businesses use sound Terms of Trade, a compliant Distribution Agreement or Reseller Agreement, and training materials for sales teams. If you’re in franchising, make sure your Franchise Agreement and manuals reflect recommended pricing only.

How The Australian Consumer Law Fits In

RPM is primarily a competition law issue, but your broader pricing and marketing activity still needs to comply with the Australian Consumer Law (ACL). In practice, this means:

• Don’t mislead consumers about pricing, discounts or savings (ACL section 18 and section 29).
• Avoid unfair practices and harsh small business terms - review your templates against the unfair contract terms regime, and consider a UCT review and redraft if needed.
• Align pricing representations and policies with your customer guarantees and any warranties or returns processes.

If you’re unsure where your pricing strategy sits, it’s sensible to get tailored advice through an ACL consultation package or by speaking with a consumer law specialist.

Practical Next Steps To Stay Compliant

1. Audit Your Templates: Check distribution, reseller, franchise and marketing approval documents for any minimum price or “adhere to RRP” language. Replace or remove risky clauses.
2. Publish Clear RRP Guides: Make them genuinely optional. Avoid incentives or threats tied to compliance.
3. Train Your Team: Give your sales and account managers simple scripts and email do’s/don’ts to avoid accidental RPM.
4. Refocus On Non-Price Levers: Tune your wholesale terms, campaign planning, and merchandising standards. Don’t tie benefits to resale price floors.
5. Tidy Your Marketing Compliance: Align discount claims, “was/now” pricing and promotions with advertised price laws and the ACL.
6. Get Advice Before Enforcement Moves: If you’re considering restricting supply due to discounting, get legal input first - communications around this are critical.

Key Takeaways

• Resale price maintenance bans suppliers from controlling or pressuring the downstream resale price - it’s generally illegal in Australia regardless of market impact.
• Recommended pricing is fine, but any threat, inducement or supply restriction linked to discounting can cross the line into RPM.
• Avoid RPM by focusing on wholesale terms, brand and merchandising standards, collaborative promotions and genuinely optional RRP.
• Review your Distribution Agreement, Reseller Agreement, Franchise Agreement and Terms of Trade to remove price control clauses and align with the ACL.
• Train sales and account teams on what to say (and not say) in emails and calls to retailers.
• When in doubt, get tailored advice - small wording choices can make a big legal difference.

If you’d like a consultation on resale price maintenance and compliant pricing strategies for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.