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The Robinson-Patman Act was passed in 1936. It is actually an amendment to the Clayton Act (1914). It was intended to save small stores (especially mom & pop grocery stores) from the chain stores spreading at the time (Wright Patman, who wrote it, later said it was aimed at A&P).

It outlawed allowances given by suppliers to retailers to help them advertise the suppliers' products. These were/are often given disproportionately to larger retailers, thus effectively lowering the price to the larger retailer and giving them an advantage. Discriminatory pricing had been outlawed in Clayton, but allowances used as a way around the law.

Obviously, R-P failed as well in stopping the spread of chain stores, and the law is widely ignored these days.

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14y ago

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