Why you couldn't find Levi's at a discount in the '70s
'Price maintenance' meant small retailers' hands were tied
Be it bell bottoms or beige corduroys, shoppers just couldn't find a deal on a certain brand of denim in the early 1970s.
Turns out that was by design: Levi Strauss didn't want its dungarees sold at a discount.
"The products are relatively inexpensive to make," explained reporter Stuart Langford for The National in January 1979. "But unless they're sold at a substantial markup, large stores with high operating costs don't like to stock them."
Levi's wanted large stores with large sales volumes to carry their brand. But those same stores didn't like that smaller stores with lower overhead could afford to set their prices lower.
A form of price-fixing
The solution Levi's arrived at was against the law, it turned out.
"In order to stop the discounters, Levi either threatened, or outright refused, to supply several small Canadian stores with any product," continued Langford.
The offenses took place between 1972 and 1975.
Levi's was in a position to make demands of retailers because of a shortage of denim due to flooding that affected the U.S. cotton crop.
Jeans had suddenly become very popular in North America and were very popular overseas.
"In Europe, they can't get nearly enough denim to supply the demand," said reporter Trina McQueen in a June 1973 look at the denim trend. "North American tourists have sold their bluejeans, still warm, for up to $20 a pair."
Levi Strauss pleaded guilty to eight counts of resale price maintenance in an Ontario court on Jan. 12, 1979.
Prosecutor Bill Manuel explained why the practice was against the law.
Meddling with the market
"This practice tends to keep prices at a level higher than they would be without it," he said outside the court building. "And Parliament is saying ... 'let competition in the marketplace set the price.'"
It wasn't the first time Levi Strauss took a hit.
"The company was fined millions of dollars for similar offences in the United States," said Langford.
According to the Globe and Mail, Levi Strauss was charged $150,000 in the 1979 case.