Exclusive distribution: ECJ sets out antitrust requirements

published on 11. August 2025 | reading time approx. 3 minuten

Exclusive distribution systems are widespread. The exclusive allocation of territories or customers to individual distributors is often essential for manufacturers to ensure the efficient distribution of their goods. In a recent ruling, the ECJ has highlighted the potential consequences for companies that fail to implement their exclusive distribution system consistently.

The case underlying the ECJ judgment of 8 May 2025 (C-581/23 – Beevers Kaas) concerned the distribution of Dutch cheese in Belgium. A Dutch cooperative had appointed a Belgian company as its exclusive distributor for Belgium. This situation persisted for over 20 years until a Dutch supermarket chain with branches in Belgium began sourcing the cheese directly from the cooperative and offering it in its Belgian stores. The Belgian distributor objected to this new form of competition coming from abroad.

What are the antitrust requirements for exclusive distribution?

To begin with, we would like to provide some legal context for the decision: An exclusive distribution system means that a specific territory or customers are assigned exclusively to one or more distributors. Competition law restricts exclusive distribution systems. If the market shares of the parties involved are 30% or less, it is possible to benefit from a blanket exemption under the so-called Vertical Block Exemption Regulation (“VBER”). However, the following point, among others, must be taken into account during implementation: Companies must distinguish between active and passive distribution. Active distribution means that a distributor actively targets their customers. In an exclusively assigned territory or to exclusively assigned customers, this can be prohibited to all distributors other than the exclusive distributor. In contrast, passive distribution, i.e. responding to unsolicited customer requests, must always be permitted to all distributors. If the market share exceeds 30%, the VBER does not apply and an individual exemption (Article 101 (3) TFEU) is necessary. The specific circumstances of each case must be considered, which makes the assessment significantly more complex.

Returning to the Belgian case: The Dutch supermarket chain's distribution in Belgium gave rise to a legal dispute. The Dutch manufacturer of the cheese had agreed in a contract with the Belgian distributor not to sell to Belgian distributors itself. However, the contracts with other distributors did not include a prohibition on actively selling to Belgian buyers. Therefore, the ECJ had to clarify whether, in order to benefit from the exemption under the Vertical Block Exemption Regulation, the supplier must prohibit all other distributors from selling in exclusively allocated territories.

ECJ ruling: The obligation must be imposed on all distributors

The ECJ affirmed this. Granting exclusivity is “necessarily” linked to the obligation for the supplier to protect the exclusive distributor from active sales by its other distributors. Therefore, the Dutch cheese manufacturer should have prohibited all distributors from actively selling in the exclusive territory of the Belgian distributor. Only then could legal action be taken against those who contravened this prohibition. The ECJ also clarified that for an effective territorial allocation, it is not sufficient that the other distributors do not actually distribute in the exclusive territory. The essential element in this regard is an actual agreement between the supplier and the distributor.

The ECJ also made it clear that the form of the agreement is irrelevant. Therefore, a verbal commitment from the distributors would suffice. However, if a dispute were to arise, it would be much more difficult to prove that all distributors were actually bound by such agreements. It is therefore strongly recommended that such agreements be set out in writing. This also has the advantage of containing all the rules relevant to the business relationship in one document. This creates clarity and reduces the potential for conflict, particularly in long-standing contractual relationships where contact persons may change.

Conclusion: What does this decision mean for companies?

Companies with an exclusive distribution system should view the ECJ's decision as a wake-up call. They should critically review their distribution agreements and practices. Particular attenion should be paid to the following questions:

Do all relevant contract templates prohibit active sales into the exclusively assigned territory of other distributors or to their exclusively assigned customers
Have all distributors signed a written distribution agreement containing such an obligation?
Does the entire distribution system follow a coherent overall concept? Has this concept been consistently implemented in all relevant contract templates?
Has the distribution system been scrutinised under antitrust law?

The ECJ ruling illustrates the potential consequences of inconsistent implementation of an exclusive distribution system: the supplier cannot effectively protect its exclusive distributors from active distribution by other distributors within exclusive territories. Furthermore, the anti-trust exemption under the Vertical Block Exemption Regulation may no longer apply to the entire contract, which could negatively affect the legal effectiveness of other restrictive clauses. This results in a significant loss of legal certainty.