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Retailers warned over selective distribution agreements

UK brands have been warned they may need to change their selective distribution policies following a ruling by the German competition authority, the Federal Cartel Office (FCO), relating to Asics last week.

The authority found that the provisions of Asics’ German subsidiary, which prohibit distributors from using online price comparison sites and the Asics brand names on third party websites to direct customers to their own online shops, are anti-competitive.

It said these provisions are concerned primarily with controlling online and offline price competition.

The decision relates to Asics’ old distribution policy (SDP1), which was introduced in 2011 but replaced by a new policy called SDP2 from January 2015 that aims to reflect “an enhanced consumer-oriented approach”.

Asics said it closely co-operated with the FCO in the development of its current distribution policy SDP2 to ensure it adhered to the FCO’s specific requirements.

Stephen Sidkin, chair of the fashion law group at law firm Fox Williams, said: “UK brands operating selective distribution systems which contain similar restrictions risk attack by competition authorities within the EU.“

He said it is now open to both the European Commission and the national authorities of EU member states to follow the lead of the FCO.

“Indeed national competition authorities may feel the need to do so where the complainant is a retailer incorporated in the particular member state.”

Asics said it hopes the EU sector inquiry will lead to clarifications with regard to interpretation of the relevant guidelines and that these clarifications will apply throughout the EU.

“The FCO’s proceedings show that central matters relating to EU competition law need to be uniformly regulated for all member states, Deviating interpretations at the member state level consequently hinder the introduction of EU-wide, uniform distribution systems,” the company said.

“A uniform solution issued by the EU Commission would therefore also benefit consumers and thus be desirable.”

@Tara_Hounslea

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