refers to when a retailer or wholesaler is ‘tied’ to purchase from a supplier on the understanding that no other distributor will be appointed or receive supplies in a given area. When the sales outlets are owned by the supplier, exclusive dealing is because of vertical integration
, where the outlets are independent exclusive dealing is illegal due to the Restrictive Trade Practices Act, however, if it is registered and approved it is allowed.
Exclusive dealing can be a barrier to entry, it can be defended on the grounds that it is beneficial to consumers as it can allow after sales service to be better.
Examples of exclusive dealing
- Tied petrol stations that only deal with one petroleum supplier.
- Public houses tied to breweries.
- Toshiba exclusively sells large capacity 1.8" hard drives to Apple Computers