Recommended Retail Price (RRP) Rules in New Zealand

If you sell products in New Zealand (whether you’re supplying stock to retailers, running an online store, or operating a bricks-and-mortar shop), you’ve probably seen “RRP” pop up in supplier catalogues, wholesale price lists, or product packaging.

RRP stands for recommended retail price - and while it sounds simple, the legal and practical realities can get murky once you start talking about what’s “recommended” versus what’s effectively required.

In this guide, we’ll break down what recommended retail price really means in NZ, how it fits with NZ competition and consumer laws, and how you can set (or use) RRP without accidentally creating pricing disputes, misleading customers, or crossing into risky territory.

What Is Recommended Retail Price (RRP) And Why Do Businesses Use It?

Recommended retail price (often shortened to RRP) is the price a supplier (or brand owner, importer, manufacturer, or distributor) suggests a retailer charge consumers for a product.

RRPs are common because they help create consistency in the market and reduce confusion for customers. They also make it easier for retailers to position products (especially when you’re selling a wide range of items and need a quick pricing benchmark).

Common Reasons Suppliers Set An RRP

• Brand positioning: An RRP can communicate that a product is “premium”, “mid-range”, or “budget”.
• Launching a new product: When retailers don’t have market data yet, an RRP provides a starting point.
• Wholesale-to-retail margin guidance: RRPs can help retailers understand the typical margin that makes the product commercially viable.
• Marketing consistency: If the supplier advertises the product, an RRP can help align advertising messaging (but you still need to be careful about consumer law claims).

What RRP Is Not

This is the key point: an RRP is not automatically a legally enforceable price. “Recommended” is not the same as “mandatory”.

Retailers will usually remain free to set their own prices - and in many cases, trying to force a retailer to sell at a particular price can raise serious legal issues in NZ.

Can You Enforce A Recommended Retail Price In New Zealand?

For most small businesses, the safest way to think about recommended retail price is this:

You can recommend a price - but you generally shouldn’t require it.

In New Zealand, competition law is largely governed by the Commerce Act 1986. One major issue to be aware of is resale price maintenance (often shortened to “RPM”).

What Is Resale Price Maintenance (RPM)?

Resale price maintenance is where a supplier tries to control the minimum price a retailer can sell goods for.

That can include:

• telling retailers they must sell at a certain price;
• pressuring retailers not to discount below a certain price;
• threatening consequences if a retailer sells below a minimum price (for example, refusing to supply them);
• incentivising retailers to stick to a minimum price in a way that effectively becomes “mandatory”.

RPM risk is one of the biggest legal “watch outs” when you’re talking about recommended retail price, because a recommendation can cross the line if it’s backed by pressure or penalties.

If you’re a supplier and you want to protect your pricing strategy, the better approach is usually to focus on strong commercial terms and brand strategy, rather than trying to “lock in” a retail price.

What About Setting A Maximum Price?

Some suppliers consider setting a maximum resale price (rather than a minimum). Depending on how it’s structured and applied in practice, this may present different competition law considerations to minimum price requirements - but it still needs to be handled carefully, especially if it affects how retailers compete on price.

If you’re considering any kind of “price controls” beyond a genuine recommendation, it’s worth getting advice early so you don’t build a sales model that creates regulatory risk.

Supplier Basics: How To Set An RRP Without Creating Legal Or Commercial Risk

If you’re a supplier, importer, or manufacturer, you’ll usually want an RRP that’s commercially sensible and easy for retailers to work with - while staying on the right side of the Commerce Act.

1) Build Your RRP From Real Numbers (Not Just A Guess)

A practical way to set recommended retail price is to work backwards from the realities of your market:

• your wholesale price (including any volume tiers);
• freight, storage, and handling costs (if relevant);
• the margin retailers typically need in your industry;
• GST treatment (for example, whether you communicate RRPs as GST-inclusive for consumer-facing clarity - for tax treatment, it’s best to confirm with your accountant);
• competitor pricing and customer expectations.

It’s also worth pressure-testing whether the RRP is achievable for different channels. For example, an online retailer might be able to operate on lower overheads than a boutique store with higher rent and staffing costs.

2) Be Clear In Your Communications: “Recommended” Means Recommended

Make sure your catalogues, invoices, price lists, and emails describe the recommended retail price as exactly that - a recommendation.

Avoid wording that suggests a retailer is “not allowed” to discount, or that they must maintain a minimum price to keep supply. Even if your intention is just to protect brand value, the way you communicate matters.

3) Use Commercial Agreements To Define The Relationship (Not Just The Price)

Even when you can’t (and shouldn’t) force a retail price, you can still protect your business with properly structured agreements that set clear expectations about:

• territory or channel arrangements (where appropriate);
• ordering and payment terms;
• forecasting and stock management;
• returns processes;
• brand and marketing guidelines (including how your intellectual property is used);
• termination rights.

Depending on your model, you might use a Supply Agreement for supplying goods to a retailer, or a Distribution Agreement if you’re appointing someone to distribute your products more broadly.

If you’re supplying to multiple retailers and want consistent processes, it’s also common to set up strong wholesale ordering terms (and keep them consistent across your customer base).

4) Be Careful With “Discounting Rules” In Promotions

Suppliers often run promotions (for example, “buy 10 units, get 10% off”) and want retailers to advertise the promotion at a certain price.

It’s usually fine to provide recommended promotional pricing and suggested marketing materials, but be careful not to turn that into a minimum retail price requirement across the board.

If you want a retailer to participate in a specific supplier-funded promotion, it’s a good idea to clearly document what the promotion is, how long it runs, and what each party is responsible for (including who pays for what). This keeps it commercial and transparent, rather than becoming “price pressure”.

Retailer Basics: How To Use RRP In Pricing And Advertising (Without Misleading Customers)

If you’re a retailer, recommended retail price can be helpful - but it can also create risk if you use it in advertising in a way that implies a discount that isn’t real.

This is where the Fair Trading Act 1986 becomes particularly important. The Fair Trading Act prohibits misleading or deceptive conduct in trade, including misleading pricing claims.

Using RRP To Show “Savings”

Retailers often advertise products like:

• “RRP $199, our price $149”
• “Save $50 off RRP”
• “Was $199 (RRP), now $149”

Those types of claims can be risky if the RRP isn’t a genuine reference point in the market. For example, if the product is almost never sold at the RRP by anyone, advertising a big “discount” off RRP could be challenged as misleading.

It’s also important to be accurate about what you mean by “advertised price” and what is actually payable (including GST, mandatory fees, delivery charges, and surcharges where relevant). Pricing transparency issues often come up in ecommerce and promotional campaigns, so it’s worth getting your pricing practices right from day one. If you need a refresher on price representations, advertised price rules are a good starting point.

What If A Supplier “Strongly Suggests” You Follow Their RRP?

As a retailer, you can usually choose your own resale price. But in real life, supplier relationships can feel sensitive - especially when you rely on a supplier for popular stock.

If you feel pressured not to discount (for example, being told you’ll lose supply if you sell below a certain price), that’s a sign you should pause and get advice. Even if the supplier calls it “RRP”, it may be functioning like a minimum enforced price.

Don’t Forget Consumer Guarantees And Returns

Recommended retail price isn’t just about competition law or advertising - it also connects to customer expectations. In NZ, the Consumer Guarantees Act 1993 applies to many sales to consumers and creates automatic guarantees around acceptable quality, fitness for purpose, and matching description.

If you sell consumer goods, your pricing, returns messaging, and warranties should all align with NZ consumer law. If you provide any “warranties against defects” or additional promises, they should be drafted carefully so they’re clear and compliant. For some businesses, a warranties approach is part of building customer trust without creating confusion.

Common “RRP” Mistakes That Can Hurt Your Business

Most recommended retail price issues don’t start with bad intentions. They start with busy business owners moving fast - and accidentally using the wrong wording, copying a supplier template, or rolling out a promotion without checking the legal implications.

Here are some common traps to avoid.

1) Treating RRP Like A Rule (Instead Of A Guide)

Suppliers sometimes say “RRP is $X” but then react negatively when a retailer discounts - by threatening supply changes, removing access to products, or “punishing” discounting behaviour.

Even if the goal is to protect your brand, this can shift from a recommendation into something that looks like resale price maintenance.

2) Advertising “Discounts” Against An RRP That Isn’t Real

If you’re a retailer and you’re using RRP as your comparison price, check whether it’s truly a meaningful reference point. If customers (and regulators) could reasonably think the product is commonly sold at RRP when it isn’t, that’s where you can run into Fair Trading Act problems.

3) Not Having Clear Wholesale Or Retail Terms

Pricing disputes often become messy when there’s no clear agreement covering the overall relationship. If your key terms only exist in emails, texts, or informal conversations, it’s much harder to resolve issues when things go wrong.

Whether you’re supplying goods or reselling them, clear terms reduce misunderstandings about payment timelines, refunds/returns between businesses, liability for defects, and what happens if the relationship ends. Many businesses also build these rules into terms of trade so the process stays consistent as they grow.

4) Confusing RRP With “Minimum Advertised Price” Policies

Some businesses attempt to restrict how a retailer advertises pricing (for example, “you can’t show a price lower than $X online”). Depending on how it’s structured and enforced, this can still create competition law risk - especially if the practical outcome is preventing discounting.

If you’re considering any policy that limits discounting behaviour (even indirectly), it’s worth getting advice before rolling it out.

5) Not Aligning With Your Broader Business Protections

Pricing strategy is only one part of your legal foundation. If you’re selling online, collecting customer data, or running marketing campaigns, you also need to make sure your business is legally protected across the board (and compliant with the Privacy Act 2020, consumer law, and contract law).

That’s where the right contracts and policies really matter - for example, clear resale terms, online store terms, and supply arrangements that reflect how you actually operate.

Practical Steps To Get RRP Right In Your Contracts And Processes

If you want your recommended retail price approach to work commercially (and not blow up into an awkward supplier/retailer dispute), it helps to set things up properly from the start.

For Suppliers: A Simple RRP Checklist

• Document RRP as a recommendation in catalogues and price lists (avoid “must”, “required”, “cannot”, “not permitted”).
• Train your team (including sales reps) on how to talk about RRP without applying pressure.
• Use a proper agreement for supply/distribution that focuses on operational expectations rather than controlling retail price (for example, a Supply Agreement or Distribution Agreement).
• Keep marketing and brand guidelines separate from any “price enforcement” behaviour.
• Be consistent in how you treat retailers (inconsistent behaviour is where disputes and complaints often arise).

For Retailers: A Simple RRP Checklist

• Set your own resale price based on margin, overheads, and customer demand (not just because the RRP exists).
• Be careful with “was/now” and “save off RRP” claims and ensure your advertising isn’t misleading under the Fair Trading Act.
• Get your sales terms in place so customers know what to expect, especially for online orders and refunds/returns.
• Keep an eye out for supplier pressure that goes beyond a genuine recommendation.
• Use the right reseller structure if you’re formally reselling another business’s products under agreed terms - in some cases a Reseller Agreement is the cleanest way to set expectations.

One More Watch Out: Unfair Conduct And Complaints

Pricing is a hot spot for complaints - especially if a business feels it’s being treated unfairly, excluded, or pressured.

If you’re building a sales channel strategy (for example, selling direct-to-consumer and also through retailers), it’s worth thinking about how your pricing and supply decisions look from the outside. If a dispute escalates, conduct may be characterised as aggressive or unfair even if you didn’t intend it that way. It can help to sanity-check your approach against unfair business practices risks and make sure you’ve got clear, written commercial reasons for your decisions.

Key Takeaways

• Recommended retail price (RRP) is a suggested price, not an automatic rule - retailers will usually remain free to set their own resale prices.
• Suppliers should be cautious about anything that looks like enforcing a minimum retail price, as this can raise resale price maintenance concerns under the Commerce Act 1986.
• Retailers should be careful when advertising “discounts” off RRP, because misleading price representations can breach the Fair Trading Act 1986.
• Consumer law still applies regardless of pricing, including guarantees under the Consumer Guarantees Act 1993 and clear “advertised price” practices.
• Strong written agreements reduce pricing disputes by setting clear expectations on supply, reseller arrangements, promotions, payment terms, returns, and brand guidelines.
• Getting the legal foundations right from day one makes it easier to grow confidently and avoid stressful supplier/retailer conflicts later.

If you’d like help setting up agreements for your wholesale supply, distribution model, or reseller arrangements (or if you’re worried your recommended retail price approach could create legal risk), you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.