Maple Corporation is a manufacturer of breakfast products. Maple sells its products to wholesale distributors and directly to large retail chains. Maple's Real Maple brand table syrup is very popular due to its high content of real maple syrup. To boost sales of its pancake batter mix, Maple Corporation conditions the sale of its table syrup on the buyer's agreement to buy Maple's pancake mix. To get its customers to cooperate with this arrangement, Maple gives an extra 5% trade discount for each syrup/mix transaction. The pancake batter mix is not as popular as the syrup, causing retailers to experience oversupplies of mix. To induce customers to buy the oversupply, retailers are having to offer deep discounts on the mix.
What type of arrangement is this? What law applies? What are the elements of the law? Is the Maple Corporation arrangement legal in your opinion? Why?
How does this agreement benefit Maple Corporation? Does it fairly protect Maple's interests?
Is this agreement fair to buyers of Maple's products?
Is this agreement fair to consumers in general?
Considering the fairness to each of the parties involved, is it ethical for Maple to continue with this arrangement? If not, what is the solution?
This question was answered on: Dec 18, 2020
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Dec 18, 2020EXPERT
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