You need a distribution agreement if you want to expand your business to new markets or territories and ensure that you have a well-managed distribution network. Although distribution agreements are generally vertical (i.e. between companies at different levels of the supply chain), they can affect competition between brands and suppliers. Sometimes a distributor can make significant investments in creating and developing a market for a particular product. To justify this investment, the distributor may seek protection from competition from other distributors or even from the supplier itself. These exclusivity agreements can affect EU and UK competition rules and are likely to be banned if they confer absolute protection in an area (e.g. B, part of the United Kingdom or a particular country). Another consideration in the EU context is that agreements that isolate national markets and try to maintain different prices in different Member States can also adopt EU competition rules. Signing a distribution agreement can be exciting and fruitful, but we always recommend it.
B consider all options (for example, clauses you need or competitive risks) before locking yourself into such an agreement. A distribution agreement is an agreement under which a supplier appoints an independent distributor to market it. The trader is required to buy the goods and act under his own name. The agreement defines the products for sale and the sales objectives of the distributor, as well as the conditions under which such distribution can be carried out. In Honeyrose Bakery v Lola`s Kitchen (2015), Honeyrose was named “exclusive supplier” of Lola cupcakes. But the agreement also contained an ambiguity that allowed Lola to manufacture the products herself. The Tribunal therefore found that Lola had not agreed to withdraw from this activity as a whole. Honeyrose may have taken some comfort from the fact that the word “exclusive” was used – when his appointment could have been described as “sole” more precisely (see text opposite).
Practices that can be considered abuse by a dominant company include: – the perception of too high prices; Limiting production; Refuse to provide a long-term customer for no good reason; No different fees for different numeracy customers, if there is no difference in delivery; – to subordinate a contract to factors that have nothing to do with the purpose of the contract. It is always important to consider all other agreements and agreements in a network (especially when one or more territorial restrictions and/or customers impose) when the application of the VRBE to you requires an exclusive distribution agreement, if the agreement you wish to document is territorially exclusive (i.e..