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Brands build a power vertical
28.09.2011 3328

Brands build a power vertical

Manufacturers can obtain the official right to dictate a pricing policy for monobrand dealers and prohibit them from selling competitors' products. This will only legitimize existing practices, sellers say.

One of the amendments prepared by the Federal Antimonopoly Service (FAS) for the second reading of amendments to the Law on Protection of Competition in the State Duma proposes to allow the so-called vertical agreements between the manufacturer and the seller working under the manufacturer’s brand name. “Such agreements may stipulate that the seller cannot sell the goods of competing manufacturers, follows from the text of the amendment. In addition, if the FAS amendments are adopted, the determination by the manufacturer of the pricing policy of dealers and distributors working under its trademark will not contradict the meaning of antitrust regulation, ”says Grigory Chernyshov, partner of Egorov Puginsky Afanasyev & Partners.

“There is no revolution in the offers of the service: we are talking about clearer rules for the interaction of producers and sellers of goods,” said Sergei Puzyrevsky, head of the FAS department.

The adoption of the amendment is likely to affect the relationship between Russian manufacturers of clothes and shoes and their suppliers with dealers, said Kira Balashova, general director of the Jamilko company. “We do not assume that this could affect our relationships with our European suppliers,” she continues. According to EU law, these companies do not have the right to prescribe to the distributor the price at which he must sell the goods, explains Balashova. According to the newspaper "Vedomosti".

Manufacturers can obtain the official right to dictate a pricing policy for monobrand dealers and prohibit them from selling competitors' products. This will only legitimize existing practices, sellers say.
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