Large-Packaged Goods and Robinson-Patman: Manufacturers Beware

Who requires mayonnaise by the gallon? Who needs a 50-pound sack of rice? Do large-pack products benefit the retailer or the consumer?

There is evidence that large-packaged goods such as these came into existence to help warehouse stores get around the Robinson-Patman Act’s price equality provision (section 2(a)) which requires manufactures to provide products of like grade and quality to competing buyers at equal prices, subject to some exceptions. Costco, Sam’s Club and others can use their sales volume to negotiate lower per-unit prices by buying products in unique package sizes.

Reprinted with permission from:  Food Manufacturing (http://www.foodmanufacturing.com)