fair trade laws

Fair trade laws were enacted by states in the 1930s to allow manufacturers to set prices for their products by retailers. The laws were enacted by almost every state to counteract the constant price fluctuations brought on by the Great Depression. Manufacturers wanted to set price minimums for retailers on their products because they feared that too low of prices diminished brand or product value as seen by consumers. The practice gradually was eliminated by states as international trade increased which limited enforceability of fair trade laws, and in 1975 Congress enacted legislation that made fair trade laws illegal under the Sherman Antitrust Act.

[Last updated in June of 2021 by the Wex Definitions Team]