EU Wants To Abolish Selective Dealership
Brand owners like OEMs and import agencies might lose their privilege to apply selective distribution in Europe. All retailers are giving the right to sell any brand under any condition. That could be the outcome of the European Commissions review of the European competition rules. The European Commission is currently reviewing the
BRUSSELS, Belgium – Brand owners like OEM’s and import agencies might lose their privilege to apply selective distribution in Europe. All retailers are giving the right to sell any brand under any condition. That could be the outcome of the European Commissions’ review of the European competition rules.
The European Commission is currently reviewing the existing regulations and has consulted industry organizations until the end of September this year. At present a set of rules is applicable to all sectors, including the bicycle industry, called regulation No. 2790/1999. The automotive industry has a separate set of regulations called No 1400/2002.
In theory relaxing brand owner’s rights could lead to Aldi selling Cannondale bikes; or with Decathlon selling Giant bikes. Any brand that distributes selectively would be affected, also the ones in bikes.
Today brand owners can choose who distributes their goods. Although not very common among European bicycle distributors; in many sectors retailers must meet certain objectives stipulated in selective distribution dealer contracts. These objectives include for instance a satisfactory presentation of products, well-trained personnel with technological certified know-how and a suitable sales environment.
For the bike industry the growing sales in electric bicycles could mean that selective distribution becomes more applicable. Contrary to a standard bicycle, e-Bike suppliers do require retailers to be trained and invest in specific tooling for maintenance. These “dealer contracts” have become standard in the Netherlands for example. With the new European regulation such contacts would be a thing of the past.
The European Two-Wheelers Retailers’ Association (ETRA) has been one of the industry organization involved in the European Commission consultation. “In our point of view bicycle and motorcycle retailers would be better off with the regulation now used for the car industry (Regulation No 1400/2002) instead of the regulation that applies to all other sectors. However there are strong rumours that the European Commission wants to abolish the separate legislation for the automotive sector. The general guidelines would also apply then to automotive sector together with specific regulatory rules.”
In case the European Union would choose for this option, ETRA would like to see that the general guidelines with specific regulatory rules would also apply for the bicycle sector. ETRA states that this is most favourable for the balance of power between manufacturers and dealers and would improve the legal position of dealers.