Since the early 1900's anti-trust laws have maintained a wall of separation between manufacturer/supplier, retail store and the consumer. Whether regulating toothpaste from Crest, Big Macs from McDonalds, or gas from an Exxon station, the Sherman Act, Clayton Act, Robinson-Patman Act and the Federal Trade Commission Act were created to protect consumers from companies intent on controlling distribution, prices or competition.

Time has proven the wisdom of these laws. Competition makes companies lean and focused, and weeds out the inefficient and weak. Certainly there is a sense of loss when the local drugstore or corner hardware store is forced out of business; but rhetoric and sentimentality aside- inflexibility, inefficiency or complacency are usually what brings them down, not the Wal-Mart that moves into town.

Considering the time in history and the infancy of mass retail science, anti-trust laws were critical to the growth of brand names and product integrity. They made Johnson & Johnson synonymous with quality and helped Kresge put a Kmart in every county, but they also enabled the proliferation of corner drugstores and the neighborhood hardware store.

Although anti-trust laws are strict, they were not intended to put unreasonable restraints on trade; only restraints dealing with monopolies and agreements between competing or colluding parties. Which is why the Supreme Court clarified in 1919, that under certain guidelines, individual firms have a right to choose who they deal with, and on what terms. According to their ruling, a manufacturer may refuse to deal with a specific store, withhold product, or set a suggested retail price and not be in violation of anti-trust laws.

It is on this doctrine that many manufacturers of high-end furniture have blocked consumers out of their market through MRP (minimum retail price) and Draconian distribution policies. But building a marketing strategy today around anti-trust doctrine is very tricky, and companies venturing down this path should retain good counsel. Courts have held that beyond the announcement of an MRP further communication on the matter between dealer and manufacturer, including conditional threats of termination, negotiations, ongoing discussions about resale prices, and even discriminate enforcement could be enough to allow a jury to find that an agreement between parties exists.

Manufacturers argue that they do not force anyone to charge MRP. If they write their policy correctly that will be technically true. One recent example I found was carefully worded: "...as a manufacturer and distributor of high-end furniture, we believe our furniture should be sold at fair prices that reflect the high quality of our products and allow our dealers to provide above-average service that reflects the value of our standards. Therefore, any dealer is free to charge a consumer any amount they want for our products. However, we have instituted a minimum retail price that a dealer may charge for our products and any dealer that charges less than those amounts will be terminated." That's a classic Catch-22. Charge any price you want, but if it's not our price, you'll be terminated.

One would have to be incredibly naive to believe that MRP's in the furniture industry have anything to do with protecting product and brand name integrity. If those were truly a manufacturer's primary concerns, they would put the energy and resources they expend on controlling distribution - an area where they have little competency - into an area that is supposed to be their expertise... shipping quality, undamaged merchandise. Then dealers wouldn't need full-time repairmen to deluxe new furniture before it goes on the showroom floor.

Just once, it would be refreshing if someone had the honesty to come out and say that their corporate mission, even if it drives them out of business, is to eliminate the "North Carolina" problem. A red herring which has paralyzed this industry for nearly two decades and provided a convenient scapegoat for every dealer, manufacturer or sales rep who felt like they were losing market share.

The unwitting dupe in this power struggle is the retailer standing on the sideline cheering the manufacturer on while eagerly embracing their corporate welfare. These are the ones who whined tirelessly throughout the 90's for manufacturers to "do something" about the North Carolina discounters.

The new millennium is here and retailers are getting their wish. Manufacturers "did something" about the North Carolina problem. They went into competition against them. So now instead of competing against North Carolina discounters, retailers will eventually have to go head-to-head with the very manufacturers they thought would protect them.

Over the years the manufacturers have been quietly learning the retailer's trade, acquiring talent, building consumer base, buying, acquiring or shutting down competition. MRP was only the first step. Whether stated publicly or whispered behind closed doors, the top conglomerates are mapping a path to indigenous existence with "total vertical" their final destination. "We make it, we sell it."

The wall of separation between retailer and manufacturer is crumbling and only time will tell the full effect. Whether today's manufacturers become tomorrow's Ethan Allen, or just privately owned franchises doesn't matter. The important thing is that they will survive at any cost. Many of the retailers who bought them time won't. Well, as the Israelites in the Old Testament found out when they asked for a king, "Be careful what you ask for, you just might get it."