IDI CONFERENCE 2018 Florence, 8-9 June 2018 Managing and controlling distribution at the retail level Manufacturers are showing an increased interest in retail distribution of their products. While in the past the main issue was to organize distribution at the wholesale level, through distributors, without interfering with the way the products were sold to the consumers at the retail level, in the last 50 years this attitude has substantially changed. Thus, many companies have developed franchising and similar distribution methods based on a uniform network of one-brand shops, while others have developed selective distribution systems with multi-brand outlets, where their products are sold in compliance with certain requirements. With the development of the Internet, and the increased capacity of retailers to reach consumers outside their outlet, the need for control, in the framework of a continuing relationship, especially through selective distribution, has further increased. The purpose of the 2018 IDI conference is to analyse the strategic choices to be made when mov- ing toward the control of retail distribution together with a number of topical issues regarding dis- tribution at the retail level (franchising, selective distribution and other forms of agreement with retailers).
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IDI CONFERENCE 2018 - idiproject.com · 10:10-10:40 Case Study: ... Andrew Loewinger, Nixon Peabody LLP, Washington, DC ... Beatrice Grifoni, Senior Legal Counsel, Valentino
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9:40-10:10 PANEL: The role of business consultants in deciding the appropriate strategy for getting andkeepingcontrolattheretaillevelLegalsolutionstobeadoptedbycompanieswiththeaimofstructuringanetworkofretailerswhichcanbecontrolledanddirectedby the suppliernecessarily imply the settingupof appropriatebusiness strategiesadaptedtothespecificindustry,product,market,country,etc.Apanelofbusinessconsultantsfromdifferent jurisdictionswillsharetheirexperience intheframeworkoffranchise,retaildistributionandselectivedistributionnetworks(includingon-lineandoff-line),withaprag-maticandconcreteapproachwith theaimofexplaininghowtoeffectively implement thehighest levelofcontrolonretailsalesandcustomers.
11:00-11:20 ApportioningfinancialchargesbetweensupplierandretailerThe supplier can decide, according to the traditional approach, that the distributor/franchisee bears thegreatestpartofthefinancialcharges: leaseandequipmentofthepremises;paymentoftheproductssup-pliedforresale;royaltyandotherfees.Onthecontrary, inordertomakethedealmoreacceptabletothetypeofretailerhecanfindonthemarketforhisproducts,thesuppliermayleasethepremises,supplytheproducts on consignment, etc..With the second type of option the supplier keeps a part of the financialcharges,butgetsmorecontroloverthedistributor/franchisee,bycontrollingthestock,assortment, resaleprice(wheretheretailersellsonbehalfofthesupplier:e.g.throughcommissioncontract).
12:10-12:30 ImposingconditionsregardingresaleuponretailersthroughgeneralconditionsAccordingtoarecenttrend,suppliersaretryingtoimposeuponretailerscertainlimitationsmainly(butnotonly) concerning Internet sales, without entering into a specific long term supply contract, but simplythroughgeneralconditionsincludedintheindividualsalescontracts.Doesthispracticeamounttoanagreementwhichmustcomplywithantitrustrules?Andincaseofapositiveanswer,whichclausescomplywiththerulesoncompetitionandwhichnot?
14:30-15:00 TheEuropeanCommission'spolicyregardingdistributionagreementsfollowingthee-commercesectorenquiry,withparticularreferencetothepossiblecoexistenceofparalleldistributionnetworksCompaniesdonotnecessarilychooseand followthesamedistributionmodelworldwideor in theEU,butmayhave recourse todifferent systems,dependingon thegeographical area,market, etc.Are there legalimplicationsorrestrictionsforthistypeofapproach?Howcantheyeffectivelycombineon-line,off-line,se-lective, exclusive, retail, franchise distribution? What are the implications of the new UE Regulation 302/2018ofFebruary28,2018ongeoblocking?
15:00-15:20 Which limitationsregardingthe Internetcanbe imposedonmembersofaselectivenetwork?TheCotyjudgmentoftheEuropeanCourtofJusticeThesuppliersofproductsforwhichimage/reputationandmarketpositioningmustbewarrantedneedtobeabletopreventtheirproductsfrombeingsoldunderconditionswhichdonotcomplywiththeirimage.Forthispurpose,theymaysetupaselectivedistributionnetworkandimposeuponitsmembersarestraintonsalesontheInternetwhichmaynegativelyaffecttheirimage/reputation,likeinparticularthesalethroughmarketplaces.ThisissuehasbeenrecentlyaddressedintheCotycase,whichwillbediscussedinviewofitseffectsonfu-turedevelopments.
16:10-16:30 LimitingfreeridingwithoutbreachingcompetitionrulesAny distribution network organised on a territorial basis needs to warrant a reasonable protection of itsmembersagainstcompetitionfromtheircolleaguesandatthesametimetopermitreasonableintra-brandcompetitionwithinthenetwork.Areasonablecompromisebetweenthesetwoneedshasbeenobtainedun-derEUcompetitionrulesthroughthedistinctionbetweenactiveandpassivesalesinthecontextofexclusivedistribution systems.However, thedevelopmentof on-line sales and the increaseof selectivedistributionsystemshassignificantlymodifiedthesituation.Whichmeansarestillatthedisposalofsupplierswhowanttodefendtheexistenceoftheirdistributionnet-worksagainstdisruptivepractices,alsoconsideringthenewrulesongeoblocking?
9:50-10:10 Theimportanceofchoosingarbitratorswho"knowthebusiness"Distribution contracts (agency, distributorship, franchising) are commonly drafted and managed by non-lawyers,mainlysalesmanagers,withoutconsideringthe legal framework. It isnormalthattherelationshipevolves irrespective of such legal framework giving rise to contradictory situations: contractmodificationsmadeorally,notwithstandingtheobligationtorespectthewrittenform;saleofcompetingproductstolerat-edalthoughcontrarytothecontract,etc.Insuchacontext,thedisputecanbejudgedmorecorrectlybyanarbitratorwhounderstandsthebusinessandcanconsequentlyappreciatewhattherealintentofthepartiesis.Partiesshouldthereforetrytoidentifytheprofileofthearbitratortheychoose.ThisiswhyIDIsetup,incollaborationwithSCAI,theIDArblistofar-bitratorswithspecificexperienceinthefieldofdistribution.
10:10-10:40 TheIDArblistofarbitratorsTheIDArblistofarbitrators,containsthenamesofprospectivearbitratorshavingspecificexperienceinthefieldofdistribution(agency,distributorship,franchising,etc.).Theprospectivearbitratorsaredividedintwolists:listAforthosehavingarbitrationexperienceandlistBforthosewhohaveexperienceinthefieldofdis-tribution,andwhomaybeselectedaspartyarbitrators.Each“card”ofthelistcontainsbasicinformationincludingtheCVandadescriptionofthenumberofcasesinwhich theprospectivearbitratorhasbeen involved (asarbitrator,counselor in-house) inorder to indicatethetypeofexperiencemadeindistribution.ThelistisavailableontheIDIwebsiteat:http://www.idiproject.com/content/idarb-list-arbitrators.
Jean-PaulVulliéty,Lalive,Geneva
10:40-11:00 Coffeebreak
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11:00-11:20 TheparamountimportanceoforalevidenceSincedistributioncontractsoftenpresentagapbetweenthecontractclausesandthewaytheyareactuallyapplied,itisofutmostimportancetoestablishadirectcontactbetweentheparties(andtheirwitnesses)andthearbitrators,throughanevidentiaryhearingandtoavoidtheoptionofadecisionbasedondocumentson-ly.Themainissuestobeconsidered:thedifferencebetweenpartyrepresentativesandotherwitnesses;avoid-ing thatwitness statements limit the full presentationofevidenceduring thehearing; grantingequality incrossexaminationwhenlawyerswithdifferentlegalbackgroundsareinvolved.
DidierMatray,Matray,Matray&Hallet,Liége
11:20-12:00 PANEL:Theconditionsforaneffectiveexpeditedprocedure.Acomparisonofdifferentexperi-encesAnexpeditedprocedureimpliesareductionoftimeandcostswhichishighlyappreciatedbybusiness.Thisiswhy most arbitral institutions have introduced expedited procedures for claims not exceeding a certainamountofmoney.However,inordertoorganiseanefficientexpeditedproceduresolutionsmustbefoundwhichcanacceleratetheprocedurewithoutprejudicingtheparties'rightsofdefence.Themembersofthepanelwilldiscussanumberofcriticalaspects:theamountunderwhichtheexpeditedprocedureappliesautomatically;theappointmentofasolearbitratorandthepossibilitytoderogate;meanstosimplifyprocedureforassessingevidence(documentsonly?);deadlinesfortheissuanceoftheaward.
9:30-10:00 PANEL:Whoisthe“owner”ofthecustomers’data?Theprotectionofcustomers’data,fromthemanufacturer/franchisor’sperspectivecanbegrantedthroughtheapplicationofdifferentlegalnotions,i.e.intellectualpropertyrulesapplicabletotradesecrets;databases(copyright);unfair competition rulesetc.Which is themosteffectiveprotection?Whathappenswhen thecontractwith the retailer is terminated?What rights can the retailer/franchisee claimover the data aftersuchmoment?
10:20-10:40 ManagingCRMincompliancewithprivacyrulesMost companies use CRM systems in their distribution networks allowing them to collect, elaborate andsharethedatabetweenallthemembersofthenetworkworldwide.Thesubsequenttransferofsuchdatatothecompanyandtheissuesofownershipoverthemareincreasingdisputesbetweenmembersofthenet-works,inadditiontoconfidentialityandprivacyissues(see,thenewEUPrivacyRegulation2016/679).Howtoeffectivelycomplywiththeprivacyrulesconcerningthecollectionandtransferofdatabetweendifferentjurisdictions?
Workshop 3:Managing non conformity and other products’ claims, in coordination with thesalesnetwork.Manufacturers selling theirproducts internationally facedifferent typesof liabilities, concerningpossibledefectsornon-conformityof theproducts, product liability, contractual guarantees, consumerprotection rules etc., that varydependingonthespecificjurisdictions,orwhetherthesaleismadeB2BorB2C.Atthesametime,morethanbefore,companiesaredelegating thedistributionof theirproducts indifferent jurisdictions to thirdparties:wholesaledis-tributors,master/direct franchisees, third partiesmanaging themanufacturer’s e-commercewebsite;marketplacesandplatformsetc. In this framework, it isnotalwayseasy toallocate liabilitiesbetween themembersof the salesnetwork,tosetupuniformstandardrules limitingthemanufacturer’s liabilities,and, finally, tosatisfythefinalcus-tomer.Thisworkshopaimsatexchangingdifferentviewsandexperiencesontheseissues.
11:00-11:20 EstablishingadirectrelationshipbetweensupplierandenduserthroughacontractualwarrantyWithrespecttoconsumergoods,manufacturerstendtoprovideadirectwarrantytotheenduser,whowillbeentitledtoreplacementorrepairbythesupplierand/orhisnetwork.Thisimpliesthatthemanufacturermustorganizethenecessarylogisticsforperformingtheservice(repair,replacement)totheendusersanddeterminetheconditionswhichmustbeobservedbytheend-userinordertoavailhimselfoftheguarantee(durationoftheguarantee,proofofthedateofpurchase,etc.).WithintheEUtheconditionsofguaranteetotheconsumerareeffectiveonlyiftheycomplywiththedomes-ticlawsimplementingtheEUdirective1999/44/EConconsumerguarantees(rightoftheconsumertohavenon-conforming goods replacedor repairedby the seller, for aperiodof two years from thedateof pur-chase).
SilviaBortolotti,BuffaBortolotti&Mathis,Torino
11:20-11:40 ProvidinguniformconditionsofwarrantyworldwideManufacturersneedtoestablish,asfaraspossible,uniformconditionsofguaranteeapplicableinthevariouscountrieswheretheirproductsaresold.AsregardsB2Bsales(i.e.therelationsallkindsofresellers(import-ers, distributors, etc.) this can be done by submitting their contracts of sale to the uniform law on sales(CISG)whichisinforceinmostcountriesoftheworld.However,ifthewarrantyisincludedingeneralcondi-tions of sale, they should checkwhether possible limitations of liability are effective under the applicabledomesticlaw(sincethevalidityofgeneralconditionsisnotcoveredbytheCISG).As regards sales to consumers (an issue that arises when the manufacturer sells directly to consumersthroughthe),manufacturerswillneedtocheckcomplianceoftheconditionsofsale(includingtheguaran-tee)withthedomesticconsumerprotectionlaws(note:theICCistryingtoestablishuniformconditionsofsaleforB2Csales).
CHAIR:IgnacioAlonso,EvenAbogados,Madrid;IDIagency&distributioncountryexpertforSpainLeslieThiele,WhitemanOsterman&Hanna,Albany,NewYork;IDIagency&distributioncountryexpertforU.S.A.Lawrence Guo, ZhongLunW&D Law Firm, Beijing; IDI agency& distribution country expert forChinaNadiaElBaroudi-Kostrikis,Hajji&Associate,CasablancaIDIcountryexpertforMorocco
Venue:PalazzoBorghese,SaladegliSpecchiViaGhibellina110n50122FirenzeWe kindly ask you to confirm your participation by se-lectingtherelevantboxintheregistrationform.
Thursday7June2018-Speakers/Expertsdinner 8:30pmIDI invitesall theconferencespeakersand the IDI country experts toan informaldinner,after thewel-comecocktail.Venue:CortedeiPazzi-TrattoriaBorgodegliAlbizi54/R50122FirenzeIfyouareeitheranIDIcountryexpertoraspeakeroftheconferenceplease,confirmyourparticipationbyselectingtherelevantboxintheregistrationform.WekindlyremindyouthatthiseventisreservedonlytotheIDIexpertsandconferencespeakerswhohavepreviouslybookedaplace.