Is It Legal To Set Minimum Resale Prices? (2026 Updated)

If you sell products through retailers, distributors, franchisees, or online resellers, it’s completely normal to worry about your pricing getting “undercut”. One store discounts heavily, everyone else complains, and your brand value can start to feel shaky.

So it’s a common question we hear from NZ business owners: can you legally set a minimum resale price?

This 2026 update reflects the current enforcement focus and the way modern reseller relationships work (especially online). The short version is: in New Zealand, requiring a reseller to sell at or above a minimum price is usually illegal - but there are still practical (and lawful) ways to protect your brand and manage price expectations.

Let’s break it down in plain English.

What Are “Minimum Resale Prices” (And Why Do Businesses Want Them)?

Minimum resale price usually means a supplier (you) tells a reseller (your retailer/distributor) that they must not sell below a specified price.

This can show up in different ways, for example:

• “You must sell this product for at least $99.”
• “You can discount, but not more than 10% off RRP.”
• “If you sell below our minimum, we’ll stop supplying you.”
• “You must advertise this product at no less than $X.”

Businesses usually want minimum resale prices to:

• protect brand positioning (especially premium products)
• avoid price wars that reduce margins across the market
• keep reseller relationships stable (so discounting doesn’t cause conflict)
• support service-heavy retailers who invest in showrooms, demonstrations, and after-sales support

All of those goals make commercial sense. The tricky part is that competition law doesn’t always allow you to achieve them by controlling resale price.

What Does New Zealand Law Say About Minimum Resale Prices?

In New Zealand, minimum resale pricing can trigger resale price maintenance issues under the Commerce Act 1986.

At a practical level, the Commerce Act is designed to promote competition - including price competition. Because of that, the law is generally hostile to arrangements where a supplier tries to stop independent resellers from setting their own prices.

So is it legal to set minimum resale prices?

In most normal wholesale/reseller situations, no - if you are requiring or pressuring your reseller to sell at or above a minimum price, you’re likely in risky territory.

It’s Not Just What The Contract Says

A key point many businesses miss is that it’s not only about what you write in an agreement. Risk can also come from behaviour and communications, such as:

• threatening to cut supply unless the reseller raises prices
• penalising a reseller for discounting (for example, removing rebates solely because they priced low)
• agreeing with resellers not to discount below a level
• encouraging resellers to “stick to” a minimum price as a group

If you’re setting up a reseller network, it’s worth getting the structure right early, because a pricing clause that looks “simple” can cause big headaches later.

Minimum Advertised Price (MAP) Is Also Risky If It Functions Like A Minimum Resale Price

Some businesses try to avoid minimum resale pricing by using “minimum advertised price” policies (MAP). The idea is that the reseller can sell for less, but can’t advertise below a certain price.

Be careful here. Depending on how it’s implemented, a MAP policy can still be treated as effectively controlling resale pricing, particularly if it’s enforced through threats or supply consequences.

Also remember you still need to be accurate in pricing displays and promotions under consumer law - the rules around showing prices and discounts matter a lot in NZ (especially online), and you can’t “hide” the true selling price in a misleading way. Issues like this often overlap with advertised price compliance.

What You Can Do Instead (Lawful Pricing Strategies That Still Protect Your Brand)

Even though minimum resale prices are generally not allowed, you’re not powerless. There are several common strategies that are often lawful (depending on how you apply them), and they can still help you build a consistent market approach.

1) Set A Recommended Retail Price (RRP) - As A Genuine Recommendation

You can usually publish a recommended retail price (RRP) or “suggested retail price”.

The key is in the word recommended. For it to stay on the safer side:

• make it clear resellers are free to set their own price
• avoid threats or penalties for pricing below the recommendation
• don’t coordinate with multiple resellers to “hold the line” on prices

If you’re going to provide pricing guidance, keep your messaging consistent and calm - it should read like a brand positioning guide, not a rule.

2) Control The Price When You’re The Seller (Not A Supplier)

This is a subtle but important point.

If you’re selling directly to consumers (for example through your own website), you can set whatever price you like for your store.

The legal risk usually comes in when you’re trying to control the price set by a separate business that is buying from you and then reselling independently.

So one practical approach is to:

• build a strong direct-to-consumer channel where you control pricing, and
• support resellers through non-price levers (service standards, marketing assets, product bundles, exclusivity arrangements where appropriate)

3) Use Brand Standards And Non-Price Requirements

If your real concern is brand value, pricing is only one piece of the puzzle.

Depending on your business model, you may be able to require resellers to meet service and brand presentation standards, such as:

• how products are displayed (images, descriptions, merchandising)
• what after-sales support they must provide
• minimum training or product knowledge requirements
• how warranties and returns are handled (consistently with NZ consumer law)

You can also build protections into your customer-facing documents like Terms of Trade (for wholesale customers) so the commercial relationship is clear from day one.

4) Consider A Different Commercial Model (Distribution, Agency, Or Franchise)

If pricing consistency is business-critical, it may be a sign that a simple “sell to reseller and hope for the best” model isn’t the right fit.

Instead, you might consider:

• distribution arrangements with carefully drafted commercial terms (for example, territory, marketing obligations, brand use rules)
• agency models (where the agent sells on your behalf rather than buying and reselling)
• franchising (where there’s a tighter operational system and brand control)

The right model depends heavily on your product, margins, and how much control you need (and are willing to manage). Often, the legal documents are the “make or break” part - for example, a properly drafted Distribution Agreement or Franchise Agreement can set clear expectations without stepping into unlawful price control.

How To Draft Reseller And Distribution Terms Without Accidentally Price-Fixing

Most pricing compliance issues don’t happen because a business is trying to do something “dodgy”. They happen because a well-meaning clause is copied from overseas, or because a supplier tries to “solve” a discounting problem through pressure.

If you’re working with resellers, here are practical drafting and operational tips to reduce risk.

Keep Pricing Language Clearly Non-Binding

If you include RRP in your documents (catalogues, wholesale lists, onboarding packs), consider language that makes it clear:

• the RRP is a recommendation only
• the reseller is free to determine resale prices
• there is no penalty for discounting

The right wording matters, but so does your conduct after signing. If your actions contradict the “recommendation only” wording, that’s where risk can creep in.

Be Careful With Rebates, Co-Op Marketing, And Incentives

Incentive programs are common - and they can be legitimate. The issue is when incentives become a “back door” minimum price enforcement mechanism.

For example, if a reseller loses a rebate solely because they discounted below a certain level, it may look like a punishment for price competition.

Instead, incentives can often be linked to:

• sales volume (without dictating the resale price used to achieve it)
• marketing activity (campaign participation, content usage, brand compliance)
• service standards (support availability, product training, response times)

Use The Right Agreement For The Relationship

A handshake deal is where misunderstandings happen fastest - especially when pricing disputes arise.

Depending on how you sell, you might need something like a Reseller Agreement to clearly cover:

• how orders are placed and paid for
• delivery terms and risk transfer
• brand and IP use (logos, product images, marketing copy)
• online marketplace rules (if you want to restrict sales on certain platforms)
• returns handling and customer complaints
• termination rights if the relationship is damaging your brand

If you’re feeling unsure, that’s a good sign to get tailored advice - especially because “one size fits all” templates often miss the exact points that matter in a supplier/reseller setup.

What If A Reseller Is Undercutting Everyone (And It’s Hurting Your Business)?

This is where the commercial reality hits. You might be thinking: “Okay, minimum resale pricing is risky - but what do we do when one reseller is causing chaos?”

There are a few practical steps you can consider, depending on your setup.

Step 1: Check Whether They’re Actually Breaching Any Contract Terms

Discounting alone often won’t be a breach - unless your agreement includes other enforceable obligations they’re failing to meet (for example, brand presentation standards, misuse of trademarks, selling outside a permitted territory, or unauthorised online channel sales).

This is why getting the agreement right at the start is so important: it gives you lawful levers to pull other than price.

Step 2: Focus On Brand And Channel Compliance (Not Price)

If the reseller is damaging your brand, the problem might not be the discount itself - it might be:

• misleading advertising (for example, fake “was/now” discounts)
• incorrect product descriptions
• unauthorised bundle offers
• poor customer service that reflects badly on the brand

These issues can often be managed through your reseller terms, marketing guidelines, and brand use rules, rather than pricing demands.

Step 3: Avoid “Group Pressure” Scenarios

A common trap is when other resellers complain and ask you to “do something” about the discounting reseller.

You need to be very careful not to fall into behaviour that looks like coordinating a response to stop price competition (for example, encouraging resellers to collectively maintain prices, or acting as a messenger between resellers about what prices they “should” charge).

This is the sort of conduct that can create competition law risk, even if your intention is simply to keep the peace.

Step 4: Consider Whether Your Wider Practices Could Be Seen As Anti-Competitive

Sometimes the pricing issue is part of a broader pattern (exclusive supply terms, aggressive threats, pressure tactics, “take it or leave it” conditions) that can raise wider legal concerns.

If you’re trying to tighten up a reseller network, it’s worth checking your approach against the types of conduct that can be flagged as unfair business practices - not because every strict term is illegal, but because clarity and fairness reduce disputes and reputational risk.

Step 5: Get Advice Before You Send “That Email”

Many resale price maintenance problems are created by a single badly worded email like: “If you don’t raise your price to $X by Monday, we’ll cut you off.”

Before you send something you can’t easily walk back, it’s worth getting a lawyer to help you respond in a way that protects your business while keeping you on the right side of the Commerce Act.

Key Takeaways

• Minimum resale pricing is generally not legal in New Zealand where it amounts to resale price maintenance under the Commerce Act 1986.
• It’s not just what’s in the contract - your conduct (threats, penalties, pressure) can also create risk even if the document says “RRP only”.
• You can usually set a recommended retail price (RRP), as long as it’s genuinely a recommendation and resellers remain free to set their own prices.
• MAP policies can be risky if they operate as a minimum price rule, and you still need to comply with consumer law rules around advertising and pricing.
• Brand protection can often be achieved through non-price controls like marketing standards, channel restrictions, IP use rules, and service obligations.
• The right agreement matters - a tailored reseller, distribution, or franchise structure can protect your commercial position without unlawful price control.
• Get advice early because one wrong clause or message can create competition law exposure that’s far more expensive than setting things up properly from day one.

If you’d like help setting up reseller or distribution terms that protect your brand without crossing the line, we’re here to help. Reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.