Walpole is in the process of preparing a response to the consultation issued by the Competition and Markets Authority (CMA) in respect of its draft guidance to accompany the UK Vertical Agreements Block Exemption.
This follows the submission last month of Walpole’s response to the UK government’s consultation on the block exemption. The block exemption will provide an automatic exemption from the prohibition on anti-competitive agreements for vertical agreements which satisfy certain conditions. A vertical agreement is an agreement concluded between parties that operate at different levels of the supply chain, such as between a manufacturer and a distributor or between a supplier and a retailer. The need for the block exemption arises from the UK’s withdrawal from the EU and the equivalent EU block exemption ceasing to apply in the UK on 31st May 2022.
Walpole’s response to the CMA will largely welcome the approach adopted in the proposed draft guidance, in light of its recognition of the importance of selective distributions arrangements, where distributors have to meet specified criteria in order to be authorised.
However, Walpole will also be submitting that further clarification should be provided in the draft guidance in relation to certain issues, such as greater protection for members of selective distribution systems against sales from non-authorised distributors.
The CMA’s consultation is the final step in the consultation process. The block exemption order itself is being finalised by the Department for Business, Energy & Industrial Strategy (BEIS) at the moment and is likely to be published early next month, to take effect from 1st June 2022. The final version of the CMA guidance is expected to be published towards the end of next month (again to apply from 1st June 2022).
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