Regulations, 1996

COMPETITION ACT,l994

(ACf No. XXXI OF 1994)

Exclusive Pun:hasing Agreements (Blode Exemptions)

Regulations, 1996

IN exercise orthe powers conferred by subsection ( I) of section 8

of the Competition Act. 1994. the Minister for Economic Services,after

consultation with the Commission for Fair Trading, has made the

following regulalions:-

These regulations may be cited as the Exclusive Purchasing

Agreements (Block Exemptions) Regulations, 1996.

These regulations shall come into force on the 1st August,

1996 and shall terminate on the 31st October, 1999.

3, These regulations specify the block exemption subject to such

conditions and limitations and as applicable to categories of Exc:1usive

Purchasing Agreements, decisions and practices in tenns of subsection

(I) of section 5 of the Act.

Dawn ir-regolamentijispeeiflkaw l-ei.enzjoni generali suggena ato..

ghat dawk il-kondizzjonijiet u limitazzjonijiet u kif applikabbli ghaI

kategoriji ta' ftehim ta' xiri eskJuiiv, deCiijonijiet u prattika skond is-

subartikolu (I) ta ' l-artikolu 5 ta' I-All.

For the purposes of these regulations, and unless the context

otherwise requires

"Act" means the Competition Act. 1994 which regulates

competition and provides for fair trading in Malta;

"Commission" means the Commission for Fair Trading;

" Director" means the director of the Office for Fair

Competition.

•

S. Agreements to which

only two undertakings are party and

whereby one pany, the reseller, agrees with the other, the supplier, to

purchase cenain goods specified in the agreement for resale,exc:1usively

from the supplier or from a connected undertaking or from another

undertaking which the suppl ier has entrusted with the sale of his goods,

shall be exempted from the provisions of subsection ( I) of section 5 of

the Act provided that no funhcr restriction on competition other than

the following shall be imposed:-

(a) that me supplier shall be obliged not to distribute the

contract good or goods which compete with the contract goods in

the reseller's level of distribution;

that the sellen shall be obliged not to manufacture or

(b)

distribute goods which compete with the contract goods.

The block exemption shall apply notwithstanding that the ......... pity.

reseller undertakes any or all of the following obligations

to purchase complete ranges of goods of similar nature;

(i)

to purchase minimum quantities of goods which are

(ii)

subject to the exclusive purchasing obligations;

(iii) to sell the contract goods under trade marks, or packed

and presented as specified by the supplier;

(iv) to take measures for the promotion of sales , in

particular-

(a) to advertise;

(b) to maintain a sales network or stock of goods;

(c) to provide customer and guarantee services;

(d) to employ staff having specialised or technical

training.

The block exemption shall not apply where

(a) both parties, including also panies connected within a

group of undertakings, bein, suppliers of identical goods or of

goods which are considered by users as equivalent in view of their

characteri stics, price and intended use enter into exclusive

purchasing agreements between themselves in respect of such

good"

(b) the exclusive purchasing obligation is agree4 for more

than one type of goods where these are neither by their nature nor

according to commercial usage connected to each other;

(c) the agreement is concluded for an indefinite dumtion or

for a period of more than three years.

The Commission is hereby being gi-anted the power to Commiuio::m',

withdraw the benefit of this block exemption when it finds in a particular -

case,on a request by the Director, that an agreement which is exempted

by these regulations neve nneless does nO( contribute towards the

objective of improving production or distribution of goods or promoting

technical or economic progress and which does not aJlow consumers a

fair share of the resultant benefit. and in particular where

(a) the contract goods are not s ubject to effective

competition from identical goods or goods considered by use" as

equivalent in view of their characteristics. price and intended use;

(b) access by other suppliers 10 the different stages of

distribution is made difficult to a significant extent;

(c) the supplier without any objectively justified reasoa

applies less favourable prices or conditions of sale to rescUers bound

by an exclusive purchasing obligation as compared with other

rescllers at the same level of disaibution .

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