EU LAW: British Distributor with Irish Selling Rights

Mark Hamill · 13-08-2018 03:15PM #1

The company I work for buys in stock and tools originating from many different countries across Europe. We buy as much as we direct from manufacturers (almost always cheaper), however many manufacturers have "preferred resellers" or "official dealers" and we are directed to them. This results in much of what we work with being bought via the UK, as many manufacturers in our industry give UK companies the sole selling rights for UK and Ireland. This obviously drives up prices.

My question is twofold:
1) Are there currently any EU regulations or restrictions behind this in general (It's seems anti-competition to allow 1 company have such a monopoly over multiple countries)?
2) What changes, if any, might happen when Brexit comes into effect and the UK is no longer in the EU?

Mr. Incognito · 13-08-2018 04:26PM

1. Loads if it can be proven

2. If you get an answer to that ask them for the lotto numbers while you are at it.

Borzoi · 13-08-2018 08:46PM

Mark Hamill wrote: »

1) Are there currently any EU regulations or restrictions behind this in general (It's seems anti-competition to allow 1 company have such a monopoly over multiple countries)?

There's loads but from a manufacturer's point of view it's easy to protect the established dealers, and it's in all their interests that performing dealers are looked after.

whippet · 13-08-2018 09:33PM

Usually selected dealers have training, performance and contractual obligations to the manufacturers.. it is in the interest of the manufacturers to ensure their product is supplied to customers through a controlled channel .. especially from a service point of view.

I don’t think a monopoly is in play here .. as long as there are competing products and customers can choose who to buy from.

Apple are a classic example of the partner channel .. they are so protective of their messaging and customer experience they will work though a very small number of select reseller partners who have to meet very strict sales, service and training targets to keep their reseller status and discount levels.

Mark Hamill · 14-08-2018 09:24AM

Mr. Incognito wrote: »

1. Loads if it can be proven

Any examples?

Mr. Incognito wrote: »

2. If you get an answer to that ask them for the lotto numbers while you are at it.

I realise that the effects of Brexit are a big unknown, but lets take it that the UK totally leaves the custom union (or at least get's no special concessions on this type of situation), would the regulations become more stringent or stay the same?

Mark Hamill · 14-08-2018 10:35AM

whippet wrote: »

Usually selected dealers have training, performance and contractual obligations to the manufacturers.. it is in the interest of the manufacturers to ensure their product is supplied to customers through a controlled channel .. especially from a service point of view.

I don’t think a monopoly is in play here .. as long as there are competing products and customers can choose who to buy from.

Apple are a classic example of the partner channel .. they are so protective of their messaging and customer experience they will work though a very small number of select reseller partners who have to meet very strict sales, service and training targets to keep their reseller status and discount levels.

I don't think any of the distributors in my industry get very much in the way of specialist training and we, and most of our competitors in this country, do our own service work so I'm guessing the driving force for this is sales contracts. All this does is drive up prices for the final customer.

I can't imagine that it is very profitable for the manufacturer though. They don't gain anything from the distributors extra charges and most distributors only sell to the trade, so it's not like the distributors are selling more units directly to customers and passing on more money to the manufacturer. For a lot of manufacturers in our industry, all of their stock ends up with a trade seller before final customer. Taking out the unnecessary distributor would only decrease prices for customers and increase profits for manufacturers.

Mr. Incognito · 14-08-2018 10:58AM

Mark Hamill wrote: »

Any examples?

No- Do your own research.

I realise that the effects of Brexit are a big unknown, but lets take it that the UK totally leaves the custom union (or at least get's no special concessions on this type of situation), would the regulations become more stringent or stay the same?

So if a hypotetical happens what would hypothetically ACTUALLY happen.

Good luck with that.

Mark Hamill · 14-08-2018 11:20AM

Mr. Incognito wrote: »

So if a hypotetical happens what would hypothetically ACTUALLY happen.

Good luck with that.

No, it's if something hypothetically happens, what would the effect of that be on something else. Pretty standard forward planning no?

Mr. Incognito · 14-08-2018 01:32PM

Mark Hamill wrote: »

No, it's if something hypothetically happens, what would the effect of that be on something else. Pretty standard forward planning no?

Not really.

You take it as three scenarios.

1, If brexit happens without a deal.

WTO Tariffs. Look them up. Pretty easy.

2. If brexit happens with a deal

Have to see the deal. No asnwer possible in the absence of clarity.

3, If Brexit doesnt happen.

Stays the same.

Seeing as it's August and there is no unified UK Government 1 is about 70% likely. You can add 5% every month to that.

ohnonotgmail · 14-08-2018 02:18PM

Mark Hamill wrote: »

Any examples?

I realise that the effects of Brexit are a big unknown, but lets take it that the UK totally leaves the custom union (or at least get's no special concessions on this type of situation), would the regulations become more stringent or stay the same?

No matter what happens the regulations would remain the same. EU is enshrined in UK law. Once they are out of the EU all that legislation would still exist. The UK would have to pass legislation to change it.

Mr. Incognito · 14-08-2018 03:13PM

ohnonotgmail wrote: »

No matter what happens the regulations would remain the same. EU is enshrined in UK law. Once they are out of the EU all that legislation would still exist. The UK would have to pass legislation to change it.

Not correct.

Regardless of their laws they would not form part of the customs union so tariffs and import taxes apply.

So no VAT, No European Treaties or Regulations would apply

They would have the Directives as transposed into law

They would have no free movement of goods, capital, labour or money in or out of Europe. They would all be subject to import tax.

They also do not have the infrastructure for cross border checks so basically food would rot before it cleared customs in either direction

The UK would experience hyper inflation and rapid devaluation of currency so much so that even the UK banks are moving operations out of the country,

There would probably be a run on the banks and political upheavel.

It's that serious. And in the interim the newspapers are concerned about Boris the fascist who would be king, only he's not a fascist, he will simply adopt any rhetoric to get him elected and his letterbox comments

ohnonotgmail · 14-08-2018 03:16PM

Mr. Incognito wrote: »

Not correct.

Regardless of their laws they would not form part of the customs union so tariffs and import taxes apply.

So no VAT, No European Treaties or Regulations would apply

They would have the Directives as transposed into law

They would have no free movement of goods, capital, labour or money in or out of Europe. They would all be subject to import tax.

They also do not have the infrastructure for cross border checks so basically food would rot before it cleared customs in either direction

The UK would experience hyper inflation and rapid devaluation of currency so much so that even the UK banks are moving operations out of the country,

There would probably be a run on the banks and political upheavel.

It's that serious. And in the interim the newspapers are concerned about Boris the fascist who would be king, only he's not a fascist, he will simply adopt any rhetoric to get him elected and his letterbox comments

You seem to have gone off on a tangent unrelated to what i posted. The regulations i was referring to were those around competition, as that is what the thread is about. They will not be immediately disappearing when the UK leaves the UK.

Mr. Incognito · 14-08-2018 03:46PM

ohnonotgmail wrote: »

You seem to have gone off on a tangent unrelated to what i posted. The regulations i was referring to were those around competition, as that is what the thread is about. They will not be immediately disappearing when the UK leaves the UK.

My apologies if I didnt give you the accurate and correct answer to your satisfaction on a free public internet forum

The Regulations will immediately be ineffective if there is a no deal brexit and the fall back will be UK competition law.

ohnonotgmail · 14-08-2018 03:57PM

Mr. Incognito wrote: »

My apologies if I didnt give you the accurate and correct answer to your satisfaction on a free public internet forum

It wasnt inaccurate it was irrelevant.

Mr. Incognito wrote: »

The Regulations will immediately be ineffective if there is a no deal brexit and the fall back will be UK competition law.

UK competition law is enshrined in The Competition Act 1998 which was introduced to bring the UK in to line with competition law in the rest of the EU. This act will still be in place when UK leaves the EU. Whether the UK leaves via a deal or not does not change this.

Mark Hamill · 15-08-2018 10:36AM

Mr. Incognito wrote: »

Not really.

You take it as three scenarios.

1, If brexit happens without a deal.

WTO Tariffs. Look them up. Pretty easy.

Thanks for the answer.

While looking up WTO Tariffs, the first thing I read is :

Tariffs give a price advantage to locally-produced goods over similar goods which are imported

I assume that even though the things I am talking about are locally produced and sold (in a EU sense) they would be tariffed as imported, under scenario 1, as they can only be bought in Ireland via the UK?

Mark Hamill · 15-08-2018 10:38AM

ohnonotgmail wrote: »

No matter what happens the regulations would remain the same. EU is enshrined in UK law. Once they are out of the EU all that legislation would still exist. The UK would have to pass legislation to change it.

How would that stop the EU putting tariffs and restrictions on UK sales to Ireland, once the UK leaves the EU?

ohnonotgmail · 15-08-2018 10:40AM

Mark Hamill wrote: »

How would that stop the EU putting tariffs and restrictions on UK sales to Ireland, once the UK leaves the EU?

It wouldn't, but how is that relevant to the question in the OP?

Del2005 · 15-08-2018 12:09PM

Mark Hamill wrote: »

Thanks for the answer.

While looking up WTO Tariffs, the first thing I read is :

I assume that even though the things I am talking about are locally produced and sold (in a EU sense) they would be tariffed as imported, under scenario 1, as they can only be bought in Ireland via the UK?

The company might look for a EU supplier. Why don't you contact them and ask to become their EU distributor after the UK leaves.

Mark Hamill · 16-08-2018 08:51AM

ohnonotgmail wrote: »

It wouldn't, but how is that relevant to the question in the OP?

I'm the OP, that is one half of my original question.

ohnonotgmail · 16-08-2018 08:53AM

Mark Hamill wrote: »

I'm the OP, that is one half of my original question.

I assumed the the 2nd part was a continuation of the 1st not an entirely separate question.

Mark Hamill · 16-08-2018 09:02AM

Del2005 wrote: »

The company might look for a EU supplier. Why don't you contact them and ask to become their EU distributor after the UK leaves.

The last time this came up, late last year, we did but the company in question weren't interested. These companies already have distributors for different regions in EU (some of them are their own distributors in their home country in the EU) and, at least so far, don't care about what happens in Ireland as it's a relatively small market. This might change for a few of them when they loose Ireland as a market entirely (which I suspect they will if significant tariffs hit their Irish sales after Brexit) so we will try again after Brexit is finalised.

EU LAW: British Distributor with Irish Selling Rights

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