On 8 May 2025, the Court of Justice of the European Union (CJEU) delivered its judgment in Case C‑581/23, Beevers Kaas, clarifying that establishing an exclusive distribution network under the Vertical Block Exemption Regulation (VBER 2022/720, previously VBER/RECAV 2010) requires not just territorial allocation but also imposing a parallel prohibition on active sales by other distributors, together with proof of their express or tacit consent. Merely observing that other distributors have not made active sales is not sufficient. The burden of proof lies on the supplier or exclusive distributor asserting exclusivity.
Risks and effects for businesses
The main risk for suppliers and distributors in the EU is that a distribution system might fail to qualify for the VBER exemption if the supplier grants exclusivity to one distributor, but does not extend active sales prohibitions to contracts with other distributors. In such a case, the exclusive distributor may lack enforceable territorial protection, potentially leading to invalidated clauses or litigation based on Article 101 TFEU.
In order to tackle this risk, companies should:
- Include a parallel active sales ban in all distribution agreements (where feasible);
- Where express clauses are lacking, issue specific communications to other distributors requesting that they abstain from active sales in the protected territory, and retain evidence of their acceptance;
- Implement monitoring mechanisms to track compliance and demonstrate that the prohibition has been understood and accepted.
Conclusion
The Beevers Kaas judgment raises the bar for legally compliant exclusive distribution in the EU. Relying on the mere fact that other distributors do not actively sell in a territory is not enough. Suppliers must proactively ensure that all distributors are informed and either contractually or tacitly bound to respect the exclusivity granted to a specific distributor. Reviewing your distribution agreements and introducing explicit or well-documented implicit active sales prohibitions across the network is key to ensure VBER coverage and mitigate enforcement risks.
Article published by Callol, Coca & Associates (Spain)
