Recently, the increasing power of distributors has given them the opportunity of introducing private brand (PB) products. Based on the game theory, this study analyzes the decision making of a distributor regarding the optimal pricing and quality strategies for the PB product. By analyzing the game model, it is shown that the pricing mechanism heavily depends not only on the market power of the distributor but on the quality of the PB product. It is also shown that, counter intuitively, as the market power of the distributor increases, the optimal quality of the PB product should be decreased.