delivered the opinion of the Court.
The Borden Company, respondent here, produces and sells evaporated milk under the Borden name, a nationally advertised brand. At the same time Borden packs and markets evaporated milk under various private brands owned by its customers. This milk is physically and chemically identical with the milk it distributes under its own brand but is sold at both the wholesale and retail level at prices regularly below those obtained for the Borden brand milk. The Federal Trade Commission found the milk sold under the Borden and the private labels to be of like grade and quality as required for the applicability of § 2 (a) of the Robinson-Patman Act,1 held the price differential to be discriminatory *639within the meaning of the section, ascertained the requisite adverse effect on commerce, rejected Borden’s claim of cost justification and consequently issued a cease-and-desist order. The Court of Appeals set aside the Commission’s order on the sole ground that as a matter of law, the customer label milk was not of the same grade and quality as the milk sold under the Borden brand. 339 F. 2d 133. Because of the importance of this issue, which bears on the reach and coverage of the Robinson-Patman Act, we granted certiorari. 382 U. S. 807. We now reverse the decision of the Court of Appeals and remand the case to that court for the determination of the remaining issues raised by respondent Borden in that court. Cf. Federal Trade Comm’n v. Anheuser-Busch, Inc., 363 U. S. 536, 542.
The position of Borden and of the Court of Appeals is that the determination of like grade and quality, which is a threshold finding essential to the applicability of § 2 (a), may not be based solely on the physical properties of the products without regard to the brand names they bear and the relative public acceptance these brands enjoy — “consideration should be given to all commercially significant distinctions which affect market value, whether they be physical or promotional.” 339 F. 2d, at 137. Here, because the milk bearing the Borden brand regularly sold at a higher price than did the milk with a buyer’s label, the court considered the products to be “commercially” different and hence of different “grade” for the purposes of § 2 (a), even though they were physically identical and of equal quality. Although a mere *640difference in brand would not in itself demonstrate a difference in grade, decided consumer preference for one brand over another, reflected in the willingness to pay a higher price for the well-known brand, was, in the view of the Court of Appeals, sufficient to differentiate chemically identical products and to place the price differential beyond the reach of § 2 (a).
We reject this construction of § 2 (a), as did both the examiner and the Commission in this case. The Commission’s view is that labels do not differentiate products for the purpose of determining grade or quality, even though the one label may have more customer appeal and command a higher price in the marketplace from a substantial segment of the public. That this is the Commission’s long-standing interpretation of the present Act, as well as of § 2 of the Clayton Act before its amendment by the Robinson-Patman Act,2 may be gathered from the Commission’s decisions dating back to 1936. Whitaker Cable Corp., 51 F. T. C. 958 (1955); Page Dairy Co., 50 F. T. C. 395 (1953); United States Rubber Co., 46 F. T. C. 998 (1950); United States Rubber Co., 28 F. T. C. 1489 (1939); Hansen Inoculator Co., 26 F. T. C. 303 (1938); Goodyear Tire & Rubber Co., 22 F. T. C. 232 (1936). These views of the agency are entitled to respect, Federal Trade Comm’n v. Mandel Brothers, Inc., 359 U. S. 385, 391, and represent a more reasonable construction of the statute than that offered by the Court of Appeals.3
*641Obviously there is nothing in the language of the statute indicating that grade, as distinguished from quality, is not to be determined by the characteristics of the product itself, but by consumer preferences, brand acceptability or what customers think of it and are willing to pay for it. Moreover, what legislative history there is concerning this question supports the Commission's construction of the statute rather than that of the Court of Appeals.
During the 1936 hearings on the proposed amendments to § 2 of the Clayton Act, the attention of the Congress was specifically called to the question of the applicability of § 2 to the practice of a manufacturer selling his product under his nationally advertised brand at a different price than he charged when the product was sold under a private label. Because it was feared that the Act would require the elimination of such price differentials, Hearings on H. R. 4995 before the House Committee on the Judiciary, 74th Cong., 2d Sess., p. 355, and because private brands “would [thus] be put out of business by the nationally advertised brands,” it was suggested that the proposed § 2 (a) be amended so as to apply only to sales of commodities of “like grade, quality and brand.” (Emphasis added.) Id., at 421. There was strong objection to the amendment and it was not adopted by the Committee.4 The rejection of this *642amendment assumes particular significance since it was pointed out in the hearings that the legality of price differentials between proprietary and private brands was then pending before the Federal Trade Commission in Goodyear Tire & Rubber Co., 22 F. T. C. 232. By the time the Committee Report was written, the Commission had decided Goodyear. The report quoted from the decision and interpreted it as holding that Goodyear had violated the Act because “at no time did it offer to its own dealers prices on Goodyear brands of tires which were comparable to prices at which respondent was selling tires of equal or comparable quality to Sears, Roebuck & Co.” H. R. Rep. No. 2287, 74th Cong., 2d Sess., p. 4.
*643During the debates on the bill, Representative Pat-man, one of the bill’s sponsors, was asked about the private label issue. His brief response is wholly consistent with the Commission’s interpretation of § 2 (a), 80 Cong. Rec. 8115:
“Mr. TAYLOR of South Carolina. There has grown up a practice on the part of manufacturers of making certain brands of goods for particular chain stores. Is there anything in this bill calculated to remedy that situation?
“Mr. PATMAN. ... I have not time to discuss that feature, but the bill will protect the independents in that way, because they will have to sell to the independents at the same price for the same product where they put the same quality of merchandise in a package, and this will remedy the situation to which the gentleman refers.
“Mr. TAYLOR of South Carolina. Irrespective of the brand.
“Mr. PATMAN. Yes; so long as it is the same quality. . . .”
The Commission’s construction of the statute also appears to us to further the purpose and policy of the Robinson-Patman Act. Subject to specified exceptions and defenses, § 2 (a) proscribes unequal treatment of different customers' in comparable transactions, but only if there is the requisite effect upon competition, actual or potential. But if the transactions are deemed to involve goods of disparate grade or quality, the section has no application at all and the Commission never reaches either the issue of discrimination or that of anticompeti-tive impact. We doubt that Congress intended to foreclose these inquiries in situations where a single seller markets the identical product under several different brands, whether his own, his customers’ or both. Such *644transactions are too laden with potential discrimination and adverse competitive effect to be excluded from the reach of § 2 (a) by permitting a difference in grade to be established by the label alone or by the label and its consumer appeal.5
If two products, physically identical but differently branded, are to be deemed of different grade because the seller regularly and successfully markets some quantity of both at different prices, the seller could, as far as § 2 (a) is concerned, make either product available to some customers and deny it to others, however discriminatory this might be and however damaging to competition. Those who were offered only one of the two products would be barred from competing for those customers who want or might buy the other. The retailer who was permitted to buy and sell only the more expensive brand would have no chance to sell to those who always buy the cheaper product or to convince others, by experience or otherwise, of the fact which he and all other dealers already know — that the cheaper product is actually identical with that carrying the more expensive label.
The seller, to escape the Act, would have only to succeed in selling some unspecified amount of each product to some unspecified portion of his customers, however large or small the price differential might be. The seller’s pricing and branding policy, by being successful, would apparently validate itself by creating a difference *645in “grade” and thus taking itself beyond the purview of the Act.6
Our holding neither ignores the economic realities of the marketplace nor denies that some labels will command a higher price than others, at least from some portion of the public. But it does mean that “the economic *646factors inherent in brand names and national advertising should not be considered in the jurisdictional inquiry under the statutory ‘like grade and quality’ test.” Report of The Attorney General’s National Committee to Study the Antitrust Laws 158 (1955). And it does mean that transactions like those involved in this case may be examined by the Commission under §2 (a). The Commission will determine, subject to judicial review, whether the differential under attack is discriminatory within the meaning of the Act, whether competition may be injured, and whether the differential is cost-justified or is defensible as a good-faith effort to meet the price of a competitor. “[TJangible consumer preferences as between branded and unbranded commodities should receive due legal recognition in the more flexible ‘injury’ and ‘cost justification’ provisions of the statute.” Id., at 159. This, we think, is precisely what Congress intended. The arguments for exempting private brand selling from § 2 (a) are, therefore, more appropriately addressed to the Congress than to this Court.7
The Court of Appeals suggested that the Commission’s views of like grade and quality for the purposes of § 2 (a) cannot be squared with its rulings in cases where a seller presents the defense under § 2 (b)8 that he is in good *647faith meeting the equally low price of a competitor.9 In those cases, it is said, the Commission has given full recognition to the significance of the higher prices commanded by the nationally advertised brand “in holding that a seller who reduces the price of his premium product to the level of his non-premium competitors is not merely meeting competition, but undercutting it.” 339 F. 2d, at 138.
The Commission, on the other hand, sees no inconsistency between its present decision and its § 2 (b) cases. In its view, the issue under § 2 (b) of whether a seller’s lower price is a good-faith meeting of competition involves considerations different from those presented by the jurisdictional question of “like grade and quality” under § 2 (a).
We need not resolve these contrary positions. The issue we have here relates to § 2 (a), not to § 2 (b), and we think the Commission has resolved it correctly. The § 2 (b) cases are not now before us and we do not venture to decide them. The judgment of the Court of Appeals is reversed and the case is remanded for further proceedings consistent with this opinion. T, . , ,
T, , It is so ordered.
Section 2(a) of the Clayton Act, 38 Stat. 730 (1914), as amended by the Robinson-Patman Act, 15 U. S. C. § 13 (a) (1964 ed.), provides in pertinent part:
“It shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly, to discriminate in price between different purchasers of commodities of like grade and quality, where either or any of the purchases involved in such discrimination are in commerce, where such commodities are sold for use, consumption, or resale within the United States or any Territory thereof or the District of Columbia or any insular possession or other place under the jurisdiction of the United States, and where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person *639who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them: Provided, That nothing herein contained shall prevent differentials which make only due allowance for differences in the cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which such commodities are to such purchasers sold or delivered
A proviso to §2 of the original Clayton Act excepted price discrimination “on account of differences in the grade, quality, or quantity of the commodity sold . . . .” 38 Stat. 730 (1914).
The commentators are somewhat divided on the dispute involved in this case. Supporting the Commission’s view are the Report of The Attorney General’s National Committee to Study the Antitrust Laws 158 (1955); Austin, Price Discrimination and Related Problems under the Robinson-Patman Act 39 (2d ed. 1959); Patman, The Robinson-Patman Act 27 (1938); Edwards, The Price Discrimina*641tion Law 31, 463-464 (1959); Seidman, Price Discrimination Cases, reprinted in 2 Hoffmann's Antitrust Law and Techniques 409, 424-428 (1963). Contrary views are expressed by a minority of the Attorney General’s Committee; in Rowe, Price Discrimination Under the Robinson-Patman Act 75 (1962); and in Cassady & Grether, The Proper Interpretation of “Like Grade and Quality” within the Meaning of Section 2 (a) of the Robinson-Patman Act, 30 So. Cal. L. Rev. 241 (1957).
Mr. H. B. Teegarden, who was then counsel to the United States Wholesale Grocers Association, and who apparently played a large part in drafting the bill, Hearings on H. R. 4995 before the House *642Committee on the Judiciary, 74th Cong., 1st Sess., p. 9, supplemented his oral testimony with a letter addressed in part to the proposed amendment:
“To amend the bill by inserting ‘and brands/ after the words ‘commodities of like grade and quality/ as suggested by Judge Watkins, although it may seem harmless at first sight, is a specious suggestion that would destroy entirely the efficacy of the bill against larger buyers. So amended, the bill would impose no limitation whatever upon price differentials, except as between different purchasers of the same brand. But where goods are put up under a private brand, there can only be one purchaser, namely the one for whom the brand is designed. Neither Kroger nor any independent could use an A. & P. private brand of canned fruit, for example; and to so amend the bill would leave every manufacturer free to put up his standard goods under a private brand for a particular purchaser and give him any price discount or discriminations that he might demand.
“Under the Patman bill as it stands, manufacturers are still free to put up their products under private brands; but if they do so for one purchaser under his private brand, then they must be ready to do so on the same terms, relative to their comparative costs, for a competing purchaser under his private brand; and unless that equality of treatment is required and assured, the discriminations at which the bill is aimed cannot be suppressed.” Id., 2d Sess., at 469.
Borden argues that it spends large sums to ensure the high quality of its Borden brand milk on customers’ shelves, inferring that there really is a difference between its'own milk and the milk sold under private labels, at least by the time it reaches the consumer. Of course, if Borden could prove this difference, it is unlikely that the case would be here. The findings are to the contrary in this case and we write on the premise that the two products are physically the same at the time of consumer purchase. Borden’s extra expenses in connection with its own milk are more relevant to the cost justification issue than to the question we have before us.
The market acceptability test would hardly stop with insulating from inquiry the price differential between proprietary and private label sales. That test would also immunize from the Act sales at different prices of the same product under two different producer-owned labels, the one being less advertised and having less market acceptability than the other. And if it is “consumer preferences,” dissenting opinion, p. 648, which create the difference in grade or quality, why should not Borden be able to discriminate between two purchasers of private label milk, as long as one label commands a higher price from consumers than the other and hence is of a different grade and quality? In this context perhaps the market acceptability test would be refined to preclude this differential on the grounds that Borden’s customer, as distinguished from the consumer, will not pay more than his competitor for private label milk and therefore the milk sold by Borden under one private brand is really of the same grade and quality as the milk sold under the other brand even though ultimate consumers will pay more for one than the other. Taking this approach, if Borden packed for one wholesale customer under two private labels, one having more consumer appeal than the other because of the customer’s own advertising program, Borden must sell both brands at the same price it charges other private label customers because all such milk is of the same grade and quality. At the same time, the customer buying from Borden under two labels could himself sell one label at a reduced price without inquiry under § 2 (a) because the milk in one container is no longer of the same grade arid quality as that in the other, although both the milk and the containers came from Borden. Such an approach would obviously focus not on consumer preference as determinative of grade and quality but on who spent the advertising money that created the preference — Borden’s customer, not Borden, created the preference and hence the milk is of the same grade and quality in Borden’s hands but not in its customer’s. The dissent would exempt the effective advertiser from the Act. We think Congress intended to remit him to his defenses under the Act, including that of cost justification.
This is not, of course, a helpful suggestion to those who thinP the congressional remedy would be “very difficult if not impossible” and who thus prefer the more “reasonable approach” through the courts. See Cassady & Grether, supra, n. 3, at 277.
Section 2 (b), 15 U. S. C. § 13 (b) (1964 ed.), provides as follows:
“Upon proof being made, at any hearing on a complaint under this section, that there has been discrimination in price or services or facilities furnished, the burden of rebutting the prima-facie case thus made by showing justification shall be upon the person charged with a violation of this section, and unless justification shall be affirmatively shown, the Commission is authorized to issue an order terminating the discrimination: Provided, however, That nothing herein contained shall prevent a seller rebutting the prima-facie case thus made by showing that his lower price or the furnishing of serv*647ices or facilities to any purchaser or purchasers was made in good faith to meet an equally low price of a competitor, or the services or facilities furnished by a competitor.”
The Court of Appeals relied upon Callaway Mills Co., sub nom. Bigelow-Sanford Carpet Co., CCH Trade Reg. Rep. Transfer Binder, 1963-1965, ¶ 16,800; Anheuser-Busch, Inc., 54 F. T. C. 277 (1957); Standard Oil Co., 49 F. T. C. 923 (1953); and Minneapolis-Honeywell Regulator Co., 44 F. T. C. 351 (1948). Borden adds Gerber Products Co. v. Beech-Nut Life Savers Co., 160 F. Supp. 916 (D. C. S. D. N. Y. 1958).