Beer and other Beverages Exclusive Purchasing Agreements

L.N. 152 01 1996

COMPETITION ACT 1994

(ACT NO. XXXI 01'" 1994)

Beer and other Beverages Exclusive Purchasing Agreements

(Block Exemptions) Regulations, 1996

IN exercise of the powers conferred by subsection ( I ) of section

8 of the Competition ACI , 1994 , the Mi nister for Economic Services,

after consultation with the Commission for Fair Trading, has made

the follow ing regulations: -

I . These regulations may be cited as the Beer and other Bever-

ages Exclusive Purchasing Agreements (Block Exemptions) Regula-

tions, 1996.

These regulatio ns shall come into force on the 1st August,

1996 and shall terminate on the 3 1st October, 1999.

-

These regulations specify the block exemption subject 10 such

conditions and limitations and as applicable 10 categories of Beer and

other Beverages Exclusi ve Purchasing Agreements. dccisions and

practices in terms of subsection ( \) of seclio n 5 of the Act.

In these regUlations, unless the context othelWise requires

"Act" means the Competition Act. 1994 which regulates

competition and provides for fair trading in Malta;

"beer" means an alcoholic beverage obtained by ferment-

ing a liquor prepared from malted grain (especially barley), wa-

ter and (usually) hops. The addition of other flavouring substances

is also permitted;

"Commission" means the Commission for Fair Trading;

"other beverages" means any other alcoholic and non-alco-

holie liquid prepared for human consumption, other than beer as

defined above;

"Director" means the di rector of the Office for Fair Compe-

tition ;

"undertaking" includes an importer. manufacturer, whole-

saler. agent. retailer o r any person who is involved in any com-

mercial activity whereby beer and/or beverages are sold or resold.

( I) SUbject to the conditions set out in these regulations,

subsection (I) of section 5 of the Act shall not apply to agreements to

which only two undenakings arc party and whereby one party, the

reseller, agrees with the othcr, the supplier. to purchase only from the

supplier or from another undertaking entrusted by the supplier with

the distribution of certain beers and/or certain other beverages as

specified in the exclusive purchasing agrcementls for resale in premises

used for thc sale and consumption of drinks therein as may bedcsignated

in the exclusive purchasing agreementls.

(2) The provisions of paragraph ( I) of this regulation shall

also apply where exclusive purchasing obligations of the kind described

in paragraph (I) arc imposed on the resc Uer in favour of the supplier

by another unde rtaking which is itself not a supplier.

Apart from the obligation described in regulation 5 of these

regUlations, no other restriction of competition shall be imposed on the

reseller. OIher than

(a) the obligation not to sell in or from the premises desig-

nated in the exclusive purchasing agreement. other beer and/or

other beverages which are supplied by other undertakings and

which are of the same type as the beer or the other beverages

supplied under the exclusive purchasing agreement

(b) the obligation, in the event that the reseller sells in the

premises designated in the exclusive purchasing agree ment, oth-

er beers which arc supplied by other undertakings and which are

of different type from the beers supplied under the agreement, to

sell such olher beers in refillable glass contai ners, cans, PVC (or

other types of pla~t ic) bottles, unless the sale of such beers in

draught (two-way packaging) foon is customary or is necessary

to satisfy a sufficient demand from consumers.

Regulation 5 of these regulations shall apply nOlwithsland-

ing that the resel1er undertakes any or all of the following conditions

(a) to purchase complete ranges of the beers and/or a com-

plete range of other individual beverages supplied or which may

be supplied by the supplier;

(b) 10 purchase minimum quan tities of beers and/or other

beverages which are subject to lhe e",clusive purchasing obliga-

tions

(c)

to sell the beers and/or other beverages under trade

marks

(d) to sell the beers and/or other beverages bottled , packed,

dispensed and presented, as specified by the supplier;

(e) to lake measures for the promotion of sales of the beers

and/or o ther beverages covered by the exclusive purc has ing

agree menl/s. in panicular.

(i)

to advertise.

(ii)

to maintain a sales network,

(iH)

to maintain a stock of the beers and/or other bev-

erages.

(iv)

to provide customer and guarantee services,

(v)

to employ staff havi ng specialised or tec hnical

training,

(vi)

to maintain specified minimum quality standards;

Regulation 5 o f these regulations shall not apply where

(a) suppliers of ide ntical beers and/or other beverages or

o f beers and/or other beverages which are considered by users as

eq uivalent in view of their characteristics. price and intended use.

enter into reciprocal exclusive purchasing agreements between

themselves in respect of such goods;

(b) the exclusive purchasing obligation cove rs goods

whic h are not beers and/or beverages;

(c) the exclusive purchas ing agreement is concluded for

an indefinite duration or for a period of more than three years;

(d) the supplier imposes on the reseUer the condition of a

minimum selling price of his products;

(e) the suppl ier imposes on the reselle r any fonn of penal-

ty other than the forfeiture o f the benefits envisaged therein, for

breach o f the exclusive purc hasing agreement;

(f) the supplier imposes on the reseUer the condition to

purchase more than one range of his products.

lr. regolament 5 la' dawn ir-regolamenti m'ghand ux ikun

japplika meta

il-fomituri la' birer uljew xorb iehor li jkunu identici

(a)

jew ta' bireruljew xoro iehor li jitqies mill-utenti bhala ekwi valenti

minhabba fil·ka ratteristiCi tllghhom, iI.prezz u l·uiu mahsub,

jaghmlu ftehim ta' xiri eskluiiv reeiproku bejnithom dwar dawk

l-oggetti;

(b) I-obbJigu ta ' xiri eskluiiv ikun ikopri oggetti li ma

jkunux birer uljew xorb;

(c) i1-ftehim ta' xiri eskluiiv j igi konklui ghal imien

indefinit jew ghal perjodu ta' iktar minn tlett snin

(d) il-fornitur jimponi fuq min ibiegh mill-gdid il-

kondizzjoni ta' prezz tal-bcjgh minimu taJ-prodotti t;cghu;

(c) il-fornitur jimponi fuq mill ibiegh mill-gdid kul1 ghamla

ta' pienali ma tkunx il-konfiska taI-bcnefii:i:ji fih mahsuba, ghall-

bur tal-ftehim ta' xiri eskJuiiv;

( f) il-fornitur ji mponi fuq min ibiegh mill -gdid 11-

kondizzjoni lijixtri iktar minn tip wiel'lcd tal-prodotti tieghu.

The Commission is hereby being gramed the power to with-

draw the benefit of this block exemption where it finds in a particular

case , on a request by the Director. that an exclusive purchasing agree-

ment which is exempted by these regulations. nevertheless does not

contribute towards the objective of improving production or distribu-

tion of goods or promoting technical or economic progress and which

does not allow consumers a fair share of the resultant benefit, and in

panicular where

(a) the supplier without any objectively justified reason,

refuses to supply categories of resel1ers who cannot obtain the

contract goods elsewhere on suitable terms or applies to them

differing prices or condi tions of sale;

(b) the supplier without any objectively justified reason ,

applies less fav ourable prices or conditions of sale to resellers

bound by an exclusive purchasing obligation as compared with

other reseUers at the same level of distribution .

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