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.

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

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