Distribution Agreement Price Fixing

A distribution contract is an agreement between a supplier of goods and a trader of goods. The supplier may be a manufacturer or be a trader himself who resells the goods of another. Distribution agreements may conflict with UK and EU competition law, so caution must be exercised when drawing them up. This briefing note summarizes some of the main considerations to consider when preparing a distribution agreement. Selective distribution: Selective distribution agreements, such as exclusive distribution agreements, limit the number of authorised distributors on the one hand and resale opportunities on the other. The difference from exclusive distribution lies in the fact that the limitation of the number of distributors does not depend on the number of zones, but on selection criteria linked in the first place to the nature of the product. These restrictions may respond to the manufacturer`s wish that the distributor`s efforts focus on a given geographical area, but do not exclude the distributor selling certain quantities in other locations. Location clauses present a lower risk than exclusive distribution agreements, as intra-brand competition is not excluded (see Sylvania, see above). Facts and procedures. In April 2007, the American company Stanley Assembly Technologies (SAT), a company of the Stanley Black and Decker group, and the Spanish company Euro Herramientas (EH) signed a contract for the distribution of Stanley products in Spain and Portugal for a period of one year, (…) It is clear that the last of these restrictions is particularly relevant for selective distribution. According to VABER, it is possible to prohibit authorized traders from reselling competing brands, but any obligation to boycott the products of a particular supplier will not benefit from the exception. .

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