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Exclusive Dealing




Exclusive dealing refers to when a retailer or wholesaler is ‘tied’ to purchase from a supplier on the understanding that no other distributor will be appointed or receive supplies in a given area. When the sales outlets are owned by the supplier, exclusive dealing is because of Vertical Integration , where the outlets are independent exclusive dealing is illegal due to the Restrictive Trade Practices Act, however, if it is registered and approved it is allowed.

Exclusive dealing can be a Barrier To Entry , it can be defended on the grounds that it is beneficial to consumers as it can allow after sales service to be better.


EXAMPLES OF EXCLUSIVE DEALING

  • Tied petrol stations that only deal with one petroleum supplier.

  • Public houses tied to breweries.



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