Many manufacturers and suppliers use distribution agreements as a method of expanding their sales channels abroad.
In distribution agreements, the exclusive right to resell products or services within a specific territory may be granted.
When considering these exclusive distribution agreements in the EU, EU competition law must be taken into account.
A judgment has recently been handed down on the interpretation of EU competition law in relation to these exclusive distribution agreements.
The judgment of the Court of Justice (Second Chamber) of May 8th, 2025 in case C-581/23 concerned a Dutch cheese producer and a distributor who had entered into an agreement for the exclusive distribution of its product, “Beemster cheese”, in Belgium. The producer alleged a violation of its exclusive rights because another buyer had sold the same product in Belgium.
Below, we summarise the content of the EU competition law provisions related to this judgment, before summarising the judgment itself.
- Article 101 of the Treaty on the Functioning of the European Union (EU competition law, ‘TFEU’)
Article 101(1) TFEU prohibits agreements, decisions and concerted practices between undertakings which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition, such as price-fixing, limiting or controlling production, and market sharing.
Article 101(2) provides that agreements or decisions that infringe paragraph 1 shall be automatically void.
Article 101(3) provides that the provisions of paragraph 1 shall not apply where certain conditions are met, such as the promotion of technical or economic progress and benefits to consumers.
Where an exclusive distribution agreement contains restrictive clauses in relation to competition, for example, prohibitions on resale or territorial allocations, the possibility of an infringement of Article 101(1) must be taken into account.
- Block exemption regulation for vertical agreements
Although assessing the requirements of Article 101(3) on a case-by-case basis is very burdensome, a block exemption regulation has been established. This regulation provides for an automatic exemption under Article 101(3) if certain conditions set out therein are met.
The previous Regulation (EU) No 330/2010 (hereinafter ‘the Old Regulation’) and its guidelines expired on May 31st, 2022. Its successor, Regulation (EU) 2022/720 (hereinafter “the New Regulation”) and its guidelines, were adopted on May 10th, 2022 and entered into force on June 1st.
This revision incorporates new forms of sales, such as online sales and dual distribution.
The Block Exemption Regulation applies to vertical agreements, meaning an agreement or concerted practice between two or more undertakings, each of which operates, for the purposes of the agreement or the concerted practice, at a different level of the production or distribution chain, and relating to the conditions under which the parties may purchase, sell or resell certain goods or services.
An exclusive distribution agreement between a supplier and a distributor is a typical vertical agreement.
Article 4(b) of the New Regulation provides that the block exemption does not apply where the supplier operates an exclusive distribution system, the restriction of the territory into which, or of the customers to whom, the exclusive distributor may actively or passively sell the contract goods or services.
As an exception to the above, Article 4(b)(i) provides that the block exemption applies to the restriction of active sales by the exclusive distributor and its direct customers, into a territory or to a customer group reserved to the supplier or allocated by the supplier exclusively to a maximum of five other exclusive distributors.
It should be noted that Article 4(b)(i) of the New Regulation allows for the allocation of up to five exclusive distributors, as highlighted above, whereas Article 4(b)(i) of the Old Regulation only allowed for the allocation to one distributor.
- Judgment of the Court of Justice of the European Union of May 8th, 2025 in Case C-581/23, Beevers Kaas (‘the judgment’)
(1) Background
On January 1st, 1993, Cono, a manufacturer of Beemster cheese based in the Netherlands, and Beevers Kaas, its distributor in Belgium, entered into an exclusive distribution agreement for said cheese in Belgium.
Albert Heijn operates in the supermarket sector in Belgium and the Netherlands. It purchased Beemster cheese produced by Cono.
When Albert Heijn sold said cheese in Belgium, Beevers Kaas claimed that Albert Heijn had infringed the exclusive rights granted under the exclusive distribution agreement.
The distribution agreements concluded between Cono and its purchasers do not contain any clause imposing a prohibition on active sales in the exclusive territory allocated to Beevers Kaas.
And, with the exception of the Albert Heijn companies, no purchaser of Cono has made such sales in that territory.
The question arising in this case is whether the parallel imposition requirements established in Article 4(b)(i) of the old Regulation are met, namely that the supplier must protect the exclusive distributor from active sales by all other purchasers of that supplier within the territory allocated to the exclusive distributor.
In this regard, Beevers Kaas argued that the mere fact that there were no resellers in Belgium selling products purchased from Cono could infer the implicit consent of the resellers to the prohibition of active sales under the parallel imposition requirement.
(2) Judgment
The judgment states that “the allocation by a supplier of territorial exclusivity to one of its buyers is necessarily accompanied by a parallel imposition on that supplier to protect that buyer from active selling by the supplier’s other buyers”.
Furthermore, regarding the method of agreement between the supplier and the buyer for the parallel imposition requirement, it states: concurrence of the parties’ wills may be shown both from the terms of the distribution contracts which bind the supplier to buyers who do not benefit from territorial exclusivity, where those contracts contain an express prohibition not to make such sales, and from the explicit or tacit conduct of the parties allowing the conclusion to be drawn that the latter buyers acquiesced to an invitation from that supplier not to make those sales.
However, with regard to the standard of proof, it was considered that “the fact that, except for the Albert Heijn companies, none of Cono’s other buyers engaged in active sales in the exclusive territory of Beevers Kaas is not sufficient in itself to establish the existence of an ‘agreement’ within the meaning of Article 101 TFEU”.
The judgment cited the following reasons:
Firstly, “it should be noted that the mere finding that Cono allocated an exclusive territory to Beevers Kaas and that Cono’s other buyers may have been aware of the existence of such a territory does not allow, in the absence, in particular, of a specific communication addressed to those other buyers requiring them to respect that exclusive territory, the conclusion that Cono invited them not to engage in active sales in that territory”.
Secondly, “that circumstance does show with sufficient certainty that the absence of active sales in the exclusive territory of Beevers Kaas results from the will of those other buyers to comply with a potential invitation from Cono not to engage in such sales or from an autonomous commercial decision of those other buyers not to sell in that territory”. Consequently, it was considered that this is not sufficient to prove the existence of consent.
Although this judgment was based on the Old Regulation, it remains significant under the New Regulation.
For an exclusive distribution agreement to benefit from the block exemption provided for in Article 101(1) TFEU, it must be shown that the supplier requested non-exclusive buyers to refrain from active sales in the exclusive territory and that the buyers consented. This judgment makes it clear that this standard of proof is not easy to meet.
In future practice, as indicated by this judgment, it will be necessary to include explicit clauses in contracts between suppliers and buyers who are not exclusive distributors, stipulating that they will not engage in active sales within the relevant exclusive territory.
Satoshi Minami
Vilá Abogados
For more information, please contact:
va@vila.es
October 3rd, 2025
