The Gazette 1989

GAZETTE

SEPTEMBER

1989

The classes of agreement which can qualify for block exemption and a brief synopsis of the criteria for block exemption are as follows:- 1. Excusive Distribution Agreements Regulation 1983/83 outlines tha basic form of exclusive distri- bution agreement to which the Regulation applies a block exemption; prior to 1st' July, 1983 the exemption was con- ferred by Regulation 67/67. The exemption applies to agree- ments " t o which only t wo undertakings are party and whereby one party agrees with the other to supply certain goods for re-sale within the whole or a defined area of the Common Market only to that other". Certain restrictions are per- mitted, for example, the supplier may agree not to compete with the dealer/distributor by supply- ing direct to customers in the Distributor's Territory; the dealer may be obliged not to manu- facture or distribute competing goods and may be required to purchase the goods only from the suppliers and the dealer may be prevented from seeking cus- tomers or establishing a branch or other distribution network for the goods outside his own territory. The supplier is entitled to require the dealer to purchase a full range of goods, to take minimum quantities of goods and impose promotional or packaging obligations on the dealer or to require the dealer to sell under trademark or in particular packaging specified by the supplier. Article 3 of the Regulation lists certain non-permissable clauses which will deny the right to block exemption: if manu- facturers of identical goods or goods considered by users as equivalent in view of their characteristics, price and in- tended use, enter into reciprocal exclusive distribution agree- ments between themselves in respect of such goods or if manufacturers of identical goods or goods considered by users as equivalent enter into a non- reciprocal exclusive distribution agreement between themselves in respect of such goods (unless one of them has a total annual

turnover of no more t han 100,000,000 ECU or about IR£77,500,000) or if users can obtain the contract goods in the territory only from the exclusive distributor and have no alter- native source of supply outside the territory or if one or both of the parties makes it difficult for intermediaries or users to obtain the goods from other dealers inside the common market, particularly if one or both of t hem exercises industrial property rights so as to prevent dealers or users from obtaining or from selling in the territory property marked or otherwise properly marketed goods or exercises other rights to prevent dealers from obtaining goods f r om outside the con t r act territory. Article 3 applies also to goods manufactured by an undertaking connected with a party to the agreement (as defined in the Regulation). The Regulation does not apply to beer supply or service station agreements which can be ex- empted under Regulation 1984/ 83. The Regulation expires on 31 December 1997. 2. Exclusive Purchasing Agreements Regulation 1984/83 relates to exclusive purchasing agree- ments between t wo under- takings of short or medium term duration and to beer supply agreements and service station agreements. For agreements prior to 1st July, 1983 the exemption was provided by Regulation 67/67. It acknow- ledges t he f act t hat such agreements facilitate sales of a product and lead to intensive marketing and allow consumers a fair share of the advantage of regular supply. It permits no restriction on competition on the supplier other than the obli- gation not to distribute contract goods or goods competing with them in the reseller's territory and at his level of sales; the only permitted restriction against the reseller is the obligation not to manufacture or distribute goods competitive with the contract goods; the reseller can be required to purchase complete ranges of goods, minimum

quantities, to sell under trade- mark and to undertake pro- motional activities w i t hout losing the benefit of block exemption. The Regulation does not apply block exemption to agreements between manufact- urers of identical goods or if the contract goods comprise more than one type of goods or if the agreement is for more than five years or of indefinite duration. No restriction is permitted after termination of the agreement. Drinks Industry The Regulation recognises the arrangements common in the drinks industry where in return for special commercial or fin- ancial advantages resellers agree to purchase only from the sup- plier who grants such advant- ages and permi ts block exemption provided the obliga- tions imposed on the reseller do not extend beyond the obliga- tions not to sell beer and certain other drinks supplied by third parties of the same type as those produced by the supplier, in the event of selling third party produc ts to sell in small quantities only and to advertise third party goods in a limited fashion. The exemption is not available where the agreement imposes obligations relating to goods other than drinks, is of more than 5 years duration for beer and other drinks or 10 years duration for beer alone. The obligations can not be imposed on the successor to the reseller for a longer period than the reseller himself or where any restriction in relation to goods other than drinks is imposed. In the case of tied-houses the duration may extend to the entire period for which the reseller occupies the supplier's premises; the reseller must have the rights to obtain drinks other than beer f r om alternative sources if commercially more attractive. Service Stetion Agreements The block exemp t i on also applies to service station agree- ments between t wo parties (supplier and reseller) where special commercial or financial advantages exist and the agree- ment relates only to certain

258