A Retailer Entered Into An Exclusive Agreement

Most exclusive commercial contracts are beneficial because they promote marketing support for the manufacturer`s brand. By becoming an expert on a manufacturer`s products, the distributor is encouraged to specialize in promoting that manufacturer`s brand. This may include offering special services or equipment that cost money, such as an attractive business. B, trained salespeople, long hours of work, an inventory of available products or a quick warranty service. The cost of providing some of these amenities to consumers before the sale of the product, which cannot be recovered if the consumer leaves without buying anything, can hardly be passed on to customers in the form of a higher retail price. For example, the consumer may take a “free trip” on the value services offered by a retailer, and then purchase the same product at a lower price than another retailer that does not offer expensive equipment, such as a discount store or online store. If the full-service distributor loses enough revenue, it will no longer be able to offer the services at any given time. If these services were truly useful, in the sense that the combined product and services led to higher sales for the manufacturer than the product alone would have benefited, the result will be a loss to both the manufacturer and the consumer. As a result, antitrust legislation generally does not allow for cheap vertical restrictions, such as exclusive contracts, to encourage retailers to provide additional services. This summary contains an analysis of the decision of the Turkish Competition Committee (“Board”) Tuborg (20.06.2019; 19-22/335-152) in which the Chamber withdrew the individual exception of Tuborg Pazarlama A.A. (“Tuborg”) which, from its exclusivity agreements with sellers such as (…) Commercial contracts or exclusive requirements between manufacturers and retailers are common and generally legal. Simply put, an exclusive contract prevents a distributor from selling another manufacturer`s products, and a requirement contract prevents a manufacturer from purchasing inputs from another supplier.

These rules are judged on the basis of a common sense rule that balances all pro-competitive and anti-competitive effects. The Spanish Supreme Court has annulled a contract with an exclusivity clause in favour of Repsol following a ruling by the European Court of Justice (ECJ) in which the European Court of Justice has confirmed that national courts are not prevented from assessing potentially anti-competitive agreements (…) In some cases, producers may use exclusive trade to reduce competition between them. For example, the FTC challenged exclusive provisions in sales contracts used by two major manufacturers of combustion vehicle pumps. Each company sold pumps to fire engine manufacturers on the condition that additional pumps were purchased by the manufacturer that was already supplying them.