Why you couldn't find Levi's at a discount in the '70s

Denim was hot in the '70s, and in 1979 the company pleaded guilty to keeping prices artificially high in certain stores from 1972 to 1975.

'Price maintenance' meant small retailers' hands were tied

The company pleads guilty to keeping prices artificially high in certain stores. 1:39

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.

Jeans weren't costly to make, and large stores with high overhead had to mark up the price significantly to turn a profit. Smaller stores could afford to charge less. (The National/CBC Archives)

"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.

Jeans are a fashion in high demand in 1973, but a flooding affecting the cotton crop could make denim harder to find. 1:50

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." 

"[Jeans] can be conservative ... or radical," said reporter Trina McQueen in a 1973 report on the trend for denim. (CBC News/CBC Archives)

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.