The Effects of Retail Regulations on Prices Evidence form the Loi Galland

P. Biscourp, X. Boutin and T. Vergé
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P. Biscourp: Ensae
X. Boutin: Insee
T. Vergé: Crest/LEI-ENPC

Documents de Travail de l'Insee - INSEE Working Papers from Institut National de la Statistique et des Etudes Economiques

Abstract: In 1997, a new legislation banning below-invoice retail prices came into force in France. Individually negotiated discounts could no longer be passed on to consumers, which is equivalent to allowing industry-wide price ?oors. The anti-competitive effects of such practices are well-known. The elimination of intra-brand competition is expected to lead to a sharp increase in the retail prices. Using CPI raw data, we ?nd evidence supporting this claim. The modification or revocation of the existing legislation (as it has been done in Ireland in December 2005) would then be expected to reduce retail prices.

Keywords: retail prices; pricing regulations; resale price maintenance (search for similar items in EconPapers)
JEL-codes: K23 L42 L81 (search for similar items in EconPapers)
Date: 2008
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