In a selective distribution agreement (also known as a selective distribution system or network), the supplier agrees only to supply approved distributors who meet certain criteria and who, in return, agree to sell on only to other approved distributors or end users. Selective distribution is typically adopted by a supplier where it wishes to have greater control over the resale of its products. Selective distribution is commonly used by suppliers of luxury or technically complex products in order to create a retail environment where the reputation and quality of the products is maintained. This Practice Note looks at the legal framework for assessing selective distribution agreements under EU and Member States’ competition law.
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