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 consumer 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 distribu- tion systems with multi-brand outlets, where their products are sold in compliance with cer- tain requirements. With the development of internet, and the increased capacity of retailers to reach consumers outside their outlet, the need for control, in the framework of a contin- uative 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 moving towards a control of retail distribution together with a number of topical issues re- garding distribution at the retail level (franchising, selective distribution and other forms of agreement with retailers).
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IDI CONFERENCE 2018 · Andrew Loewinger, Nixon Peabody LLP, Denver ... Beatrice Grifoni, Legal Counsel ... case of positive answer ...
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Manufacturers are showing an increased interest in retail distribution of their products.Whileinthepastthemainissuewastoorganizedistributionatthewholesalelevel,throughdistributors,withoutinterferingwiththewaytheproductsweresoldtotheconsumerattheretaillevel,inthelast50yearsthisattitudehassubstantiallychanged.
09:20-09:40 ThemainreasonsforcontrollingandorinfluencingretaildistributionThereasonswhichinducesupplierstoinvolvethemselvesindistributionattheretaillevelaremanifold: protecting brand reputation, particularly for luxury products;warranting an appro-priateservicetoconsumers;strengtheninglinkswithconsumers(e.g.forcollectingtheirdata,needs,preferences); influencingretailers' salespolicy inorder towarrant itscompliancewiththepolicyandimageofthedistributionnetwork.
Mônica Vitor Alves, International Legal Manager, Paul International, Marcq-en-Baroeul
09:40-10:10 PANEL:Theroleofbusinessconsultantsindecidingtheappropriatestrategyforget-tingandkeepingcontrolattheretaillevelLegalsolutionstobeadoptedbycompanieswiththeaimofstructuringanetworkofretailerswhichcanbecontrolledanddirectedbythesuppliernecessarilyimplythesettingupofappro-priatebusinessstrategiesadaptedtothespecificindustry,product,market,country,etc.A panel of business consultants of different jurisdictions will share their experience in theframeworkoffranchise,retaildistributionandselectivedistributionnetworks(includingon-lineandoff-line),withapragmaticandconcreteapproachwiththeaimofexplaininghowtoeffec-tivelyimplementthehighestlevelofcontrolonretailsalesandcustomers
11:20-11:40 Third option: direct or indirect control of a network of mono-brand retail-ers/franchisees?Whenenteringaforeignmarketthesuppliercanchoosebetweenadirectorindirectcontrolofthe localnetwork,according to the followingmainoptions:adirect relationwith the retailer(directunitfranchising;areadevelopmentagreement;arearepresentatives)oranindirectrela-tionship(masterfranchising,appointmentofretailersbylocaldistributoratconditionsfixedbythesupplier.Whataretheprosandconsofthetwooptions?Incaseofindirectcontrol,whichmeanscanbeusedtoovercometheproblem?Managingsub-franchisees(obligationofmasterfranchiseetoimposestandardagreement,indirectcontroloversub-franchisees,meanstoavoidfranchiseesleavingwithmasterfranchisee)
TaoXu,DLAPiper,Reston
11:40-12:10 PANEL.Establishingarelationshipwithmulti-brandretailers:themainstrategic is-suesInrecenttimessuppliersshowagrowing interest in influencingthewaymulti-brandretailerssellandadvertisetheirproducts.Thiscanbedone:(a)byestablishingalong-termrelationship,mainlythroughselectivedistributioncontracts,cornerfranchisingorsimilaragreements,(b)bysimplyrequiringretailers,throughgeneralconditions includedin individualsalescontracts,orbypoliciesestablishedunilaterallybythesupplier(e.g.MAAPPolicies)tofollowcertaincriteriawhenresellingthegoods.Compliancewithantitrustrulesplayanessentialroleinthisfield,especiallyintheEU(selectivedistribution),whiletheUSapproachappearstobemoreflexible.ThepanelwilldiscusstheprosandconsofthedifferentstrategiesinEuropeandintheUS.
12:10-12:30 ImposingconditionsregardingresaleuponretailersthroughgeneralconditionsAccording to a recent trend, suppliers are trying to impose upon retailers certain limitationsmainly(butnotonly)concerningInternetsales,withoutenteringintoaspecificlongtermsup-plycontract,butsimplythroughgeneralconditionsincludedintheindividualsalescontracts.Does this practice amount to an agreementwhichmust complywith antitrust rules? And incaseofpositiveanswer,whichclausescomplywiththerulesoncompetitionandwhichnot?
15:00-15:20 Which limitations regarding internet can be imposed on members of a selectivenetwork?TheCotyjudgmentoftheEuropeanCourtofJusticeThesuppliersofproductsforwhichimage/reputationandmarketpositioningmustbewarrant-edneedtobeabletopreventthattheirproductsaresoldunderconditionswhichdonotcom-plywiththeirimage.Forthispurpose,theymaysetupaselectivedistributionnetworkandwillimposeuponitsmemberstoavoidsalesontheInternetwhichmaynegativelyaffecttheirim-age/reputation,likeinparticularthesalethroughmarketplaces.ThisissuehasbeenrecentlyaddressedintheCotycase,whichwillbediscussedinviewofitsef-fectsonfuturedevelopments.
16:20-16:40 LimitingfreeridingwithoutbreachingcompetitionrulesAnydistributionnetworkorganisedonaterritorialbasisneedstowarrantareasonableprotec-tionofitsmembersagainstcompetitionfromtheircolleaguesandatthesametimetopermitareasonable intra-brand competition within the network. A reasonable compromise betweenthesetwoneedshasbeenobtainedinEUantitrustthroughthedistinctionbetweenactiveandpassivesalesinthecontextofexclusivedistributionsystems.However,thedevelopmentofon-linesalesandtheincreaseofselectivedistributionsystemshassignificantlymodifiedthesitua-tion.Whichmeansarestillatthedisposalofsupplierswhowanttodefendtheexistenceoftheirdis-tributionnetworksagainstdisruptivepractices,alsoconsideringthenewrulesongeoblocking?
AldoFrignani,Frignani,Virano,associati,Torino
16:40-17:00 Collectingandmanagingcustomers'dataCollectingcustomers’datahasbecomeoneofthemainreasonsforcontrollingtheretail levelof distribution. Companies use differentmeans and instruments (e.g. loyalty programs, CRMsystems)togetinformationonthesaleshabits,preferences,tastesofthecustomers.Thefol-lowingelaborationanduseofthisinformationthroughthewholenetworkworldwide,inordertoimplementacross-channelmarketingisoneofthemaingoals.Whatarethebeststrategiestobeimplementedindistributionnetworks?FilippoMariaAndreani,BusinessDevelopment,Contracting&M&ALegalAffairs,HeadofContracting&SpecialProjects, Pirelli&C.S.p.A.
WorkshopsSession 09:30–12:30Workshop 1: The recourse to arbitration for distribution disputes. The necessary condi-tionsforneutral,expeditedandcost-effectivearbitrationproceedings,withparticularref-erencetotheIDArbproject.Thereisgreatuncertaintyabouttheeffectivenessofarbitrationasameanstoresolvedisputesinthefieldofdistribution.Manybusinesspeoplebelievethatarbitrationistooexpensiveandcannotwar-rantabetterresultthantherecoursetonationalcourts,especiallywithrespecttoclaimsoflimitedeconomicvalue.Thisisnotalwaystrue.Inmanycasesarbitrationcanwarrantamoreequitableandexpedited resolution of the dispute. The actual problem is to understandwhen and under whichconditionsarbitrationcanbethemostappropriatesolution.Thisworkshopwillexaminetheprosandconsofarbitrationwithrespecttodistributionandinpar-ticularthemeansofferedbytheIDArb-SCAIproject.
09:50-10:10 Theimportanceofchoosingarbitratorswho"knowthebusiness"Distributioncontracts(agency,distributorship,franchising)arecommonlydraftedandman-agedbynon-lawyers,mainlysalesmanagers,withoutconsideringthelegalframework.Itisnormalthattherelationshipevolvesindependentlyfromsuchlegalframeworkgivingrisetocontradictorysituations:contractmodificationsmadeorally,notwithstandingtheobligationtorespectthewrittenform;saleofcompetingproductstoleratedalthoughcontrarytothecontract,etc.In such a context, the dispute can be judgedmore correctly by an arbitratorwho under-standsthebusinessandcanconsequentlyappreciatewhatthereal intentofthepartiesis.Partiesshouldthereforetrytoidentifytheprofileofthearbitratortheychoose.ThisiswhyIDIsetup,incollaborationwithSCAI,theIDArblistofarbitratorswithspecificexperienceinthefieldofdistribution.
10:10-10:40 TheIDArblistofarbitratorsThe IDArb list of arbitrators, contains thenamesof prospective arbitratorshaving specificexperience in the field of distribution (agency, distributorship, franchising, etc.). The pro-spectivearbitratorsaredividedintwolists:listAforthosehavingarbitrationexperienceandlistB for thosewhohaveexperience in the fielddistribution,andwhomaybeselectedaspartyarbitrators.Each“card”ofthelistcontainsabasicinformationandCVandthedescriptionofanumberofcasesinwhichtheprospectivearbitratorhasbeeninvolved(asarbitrator,counselorin-house)inordertoindicatethetypeofexperiencemadeindistribution.The list is available on the IDI website at: 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, it isofutmost importance toestablishadirectcontactbetweentheparties(andtheirwitnesses)andthearbitrators,throughanevidentiaryhearingandtoavoidtheoptionofadecisionbasedondocumentsonly.Themain issuestobeconsidered:thedifferencebetweenpartyrepresentativesandotherwitnesses; avoiding thatwitness statements limit the full presentation of evidence duringthehearing;grantingequalityincrossexaminationwhenlawyerswithdifferentlegalback-groundareinvolved.
DidierMatray,Matray,Matray&Hallet,Liége
11:20-12:00 Theconditionsforaneffectiveexpeditedprocedure.AcomparisonofdifferentexperiencesAnexpeditedprocedureimpliesareductionoftimeandcostswhichishighlyappreciatedbybusiness. This is whymost arbitral institutions have introduced expedited procedures forclaimsnotexceedingacertainamountofmoney.However,inordertoorganiseanefficientexpeditedproceduresolutionsmustbefoundwhichcanacceleratetheprocedurewithoutprejudicingtheparties'rightsofdefence.Themembersofthepanelwilldiscussanumberofcriticalaspects:theamountunderwhichtheexpeditedprocedureappliesautomatically;theappointmentofasolearbitratorandthepossibilitytoderogate;meanstosimplifyprocedureforassessingevidence(documentson-ly?);deadlinesfortheissuanceoftheaward.
CHAIR: Pascal Hollander, Hanotiau and van den Berg, Brussels; IDI franchisingcountryexpertforBelgiumMariaBeatriceDeli,ICCItaliaFrankSpoorenberg,SCAI,GenevaFrancescaMazza,DIS,Cologne
12:00-12:20 TheIDArbapproachtoexpeditedarbitrationfordistributiondisputesIDIhasestablished, incollaborationwiththeSwissChambers'ArbitrationInstitution(SCAI)anexpeditedarbitrationprocedure,speciallyadaptedfordisputesinthefieldofdistribution(e.g.agencyanddistributorshipcontracts,franchising,etc.),underwhichdisputescanbere-solvedbyanarbitratorwith specificexperience indistribution (whocanbe chosenwithintheIDArblistofarbitrators)andwithinashortperiodoftime(sixmonths).TheIDArbExpeditedArbitrationClausebasedonthestandardclauseundertheSwissRules,includes a set of recommendations ("IDArbRecommendations”) to the parties and to thearbitratoraimedatfacilitatingtheexpeditedresolutionofdistributiondisputes.TheclauseisintendedprimarilyfordisputeswhichdonotexceedCHF1.000.000,butmayalsobeap-propriateforhigheramounts.
FabioBortolotti,BuffaBortolotti&Mathis,Torino
12:20-12:45 Discussion
Workshop2:ProtectionandexploitationofdataindistributionnetworksGettinganeffectiveprotectionofdatahasneverbeenaneasy target for companies sharing themwith the members of their distribution networks. Recent legislative reforms (e.g. EU Directive2016/943 on Trade Secrets, the US Federal Defend Trade Secrets Act) seem to providewith newmeansofprotection,atleastforcertaincountries.Ontheotherhand,inseveraljurisdictionsprivacyrules arebecomingmore stringent (e.g. the EUPrivacyRegulation2016/679), particularlywith re-specttocustomers’data.Companiesarenowrequiredtofindtherightbalancebetweenthesetwoaspects.
09:30-10:00 PANEL:Whoisthe“owner”ofthecustomers’data?The protection of customers’ data, from themanufacturer/franchisor’s perspective can begrantedthroughtheapplicationofdifferent legalnotions, i.e. intellectualpropertyrulesap-plicable to trade secrets; databases (copyright); unfair competition rules etc.Which is themosteffectiveprotection?Whathappenswhenthecontractwiththeretaileristerminated?
10:00-10:20 Online profiling and cross channel marketing: the need to comply with privacyrulesTrackingthecustomersoverallactivityonlinethroughcookies,fingerprintingandotherprofil-ingtechniquestosendadvertisingmessagesinlinewiththeuser’sonlinenavigationandcrosschanneladvertisingarethelatestmarketingtrends.Suchtechniquesmustcomplywithpriva-cylawrequirementsandfirstofalltheneedofadequateinformationandconsent.Anoutlookoftechnicalandlegalrequirementsindifferentjurisdictions.
10:20-10:40 ManagingCRMincompliancewithprivacyrulesMost companies use CRM systems in their distribution networks allowing them to collect,elaborateandsharethedatabetweenallthemembersofthenetworkworldwide.Thesubse-quenttransferofsuchdatatothecompanyandtheissuesofownershipoverthemisincreas-ingdisputesbetweenmembersofthenetworks,inadditiontoconfidentialityandprivacyis-sues(see,thenewEUPrivacyRegulation2016/679).Howtoeffectivelycomplywiththepri-vacyrulesconcerningthecollectionandtransferofdatabetweendifferentjurisdictions?
CarlaVecchini,Regulatory&CorporateAffairs,Bulgari
10:40-11:10 Coffeebreak
11:10-11:40 Preservingconfidentialityoncustomers’dataThemainmeans companies use for protecting their trade secrets (which also includes cus-tomers’data)concern,ontheonehand,thecontractualprovisionsappliedtothemembersofthedistributionnetworkand,ontheotherhand,complianceprograms implementedwithinthe company, the group and the network. The new Directive on Trade Secrets (2016/943)givesimportantelementsinthisrespect.Whatarethemostimportantaspectstobeconsid-eredinordertoassureaneffectiveprotection?
Mercedes Clavell, Arco Abogados, Barcelona; IDI franchising country expert forSpain
11:40-12:10 PANEL:HowtoeffectivelyprotecttradesecretsinCourtdisputesDiscovery,injunction,seizures,damagesawardetc.:theremediesavailabletoprotectknow-howaccordingtothecaselawofdifferentjurisdictionsandthelatestlegislativesreforms(thenewEUDirective2016/943ontradesecrets,theUSFederalDefendTradeSecretsAct).Therisk of losing confidentiality of the trade secrets in the course of the legal proceedingmayjeopardisetheeffectivenessofthemeasures,proceduresprovidedfor.Discoveryvsconfiden-tiality:howtofindtherightbalance.
Workshop3:Managingnonconformityandotherproducts’ claims, in coordinationwiththesale’snetworkManufacturers selling theirproducts internationally facedifferent typesof liabilities, concerningpossiblede-fectsornon-conformityof theproducts,product liability, contractualguarantees, consumerprotection rulesetc., thatvarydependingon the specific jurisdictions,orwhether the sale ismadeB2BorB2C.At the sametime,morethanbefore,companiesaredelegatingthedistributionoftheirproductsindifferentjurisdictionstothirdparties:wholesaledistributors,master/direct franchisees, thirdpartiesmanaging themanufacturer’se-commercewebsite;marketplacesandplatformsetc.Inthisframework,itisnotalwayseasytoallocateliabili-tiesbetweenthemembersofthesale’snetwork,tosetupuniformstandardruleslimitingthemanufacturer’s
09:30-09:50 Thesupplier'sliabilityfornon-conformity/defectsinhisqualityassellerUndertheCISGandmostnationallawsthesupplierisresponsibletowardshispurchasersforpossibledefects(non-conformity)ofthegoodssupplied,andhisbuyerwillinturnberespon-sible towardshispurchaser,andsoonuntil theenduser. In thiscontext theparty invokingnon-conformitymustbringaclaimagainsthis sellerandthe lattercan in turnrevert to thepreviousseller(exceptinlegalsystems-likeFrance-whichpermitadirectactiontowardsthepartyresponsibleforthedefect).Suppliersmaymodifythesesituationsbyshiftingtheirliabilitytotheirbuyers,e.g.byexclud-ing the liability fornon-conformity in the contractwith theirdistributors/importers,ormaydecide to give a guarantee for defects directly to the end user,whowill be entitled to re-placementorrepairbythesupplierand/orhisnetwork.Finally, suppliers may specify their obligations in case of non-conforming goods through awarranty,inordertoreduceorincreasetheirliabilitiesinconsiderationofthespecificcharac-teristicsandneedsoftheirproducts.Thesethreeaspectswillbetreatedmoreindetailinthefollowingpresentations.
09:50-10:10 TheallocationofliabilitiesfornonconformityclaimsbetweenthemembersofthenetworkInanetworkcomposedofdistributors/importersthemanufacturermaydecidetoshifthisli-abilityfornon-conformitytothedistributors,requestingthemtofulfiltherespectiveobliga-tionsaccordingtohisdirections.Hemayimposetherespectiveconditionsofguaranteetobegranted by the distributor and provide himwith the information (assistance, training, etc.)andmeans(spareparts,replacementproducts)necessaryforperformingsuchactivity.Thespeakerwillexchangehisviewandexperienceonpossibleproblemsandstrategiesinthisrespect.
StefanoRovej,LegalCounselIveco,Torino
10:10-10:30 EstablishingspecificconditionsofguaranteeingeneralconditionsofsaleIncertainindustries(machinery,equipment,etc.)itiscommonthattheproducerincludesinhisconditionsofsaleaguaranteespecifyinghisobligationsincaseofnon-conforminggoods.Suchguaranteewillnormallystatetheremediesgranted(repair,assistance,replacement)andtheconditionsforitseffectiveness(periodofguarantee,timelynotificationofdefects).This guarantee normally provides conditions which are more appropriate for the specificneedsof the typeofproducts soldand is intended to replace theseller's liabilityotherwiseapplicable under the applicable law. It is therefore essential to accurately draft the clausewhichexcludestheliabilityprovidedbylawbyreplacingitwiththecontractualguarantee.Itisalsoimportanttomakesurethatthelimitationsofliabilitycontainedinthegeneralcondi-tionsareeffectiveundertheapplicabledomesticlaw.
11:20-11:40 ProvidinguniformconditionsofwarrantyworldwideManufacturersneedtoestablish,asfaraspossible,uniformconditionsofguaranteeapplica-bleinthevariouscountrieswheretheirproductsaresold.AsregardsB2Bsales(i.e.therela-tionsallkindsofresellers(importers,distributors,etc.)thiscanbedonebysubmittingtheircontractsofsaletotheuniformlawonsales(CISG)whichisinforceinmostcountriesoftheworld.However, if thewarranty is included ingeneralconditionsof sale, theyshouldcheckwhetherpossiblelimitationsofliabilityareeffectiveundertheapplicabledomesticlaw(sincethevalidityofgeneralconditionsisnotcoveredbytheCISG).As regards sales to consumers (an issue that ariseswhen themanufacturer sells directly toconsumersthroughtheinternet),manufacturerswillneedtocheckcomplianceofthecondi-tionsofsale(includingtheguarantee)withthedomesticconsumerprotectionlaws(note:theICCistryingtoestablishuniformconditionsofsaleforB2Csales).
CHAIR: Ignacio Alonso, EvenAbogados,Madrid; IDI agency&distribution countryexpertforSpainLeslieThiele,WhitemanOsterman&Hanna,Albany,NewYork;IDIagency&distri-butioncountryexpertforU.S.A.LawrenceGuo,ZhongLunW&DLawFirm,Beijing;IDIagency&distributioncountryexpertforChinaNadia El Baroudi-Kostrikis, Hajji & Associate, Casablanca IDI country expert foragency&distributioninMorocco
Payment: Registrationonline:Creditcardorbanktransfer.Afterhavingcompletedthepayment,youwillreceiveaconfirmationofyourregistrationbye-mail.Registrationby faxorbyemail:bank transfer only. Confirmationof your registrationwillbesentafterhaving received the registration formtogetherwith theevidenceofthepayment.Forbanktransferpayment,thepaymentshouldbetransferredwithnocosttoIDI.NOCHEQUEPAYMENTSWILLBEACCEPTED.
Cancellation CancellationrequestreceivedinwritingtoIDIProjectonorbefore29May2018willbesubject to a 20%administration chargeof the total feespaid.After that date no re-fundsarepossible.
DressCodeTheconferencedresscodeisbusinessattireforworkingsessionsandsmartcasualforsocialevents.HotelAccommodationIDIreservedaverylimitednumberofroomsattheBorghesePalaceArthotel(ViaGhibellina174/r)atspecialratesfortheIDIconferenceparticipants.Please,contactthehoteldirectly(MrsTeresaPoppi,+39-055-284363,[email protected])mentioningtheIDIannualconference2018atPalazzoBorgheseandaskingfortheagreedratesfortheavailablerooms.Therearealsosomehotelsclosetothevenueoftheconference,wherewehaveagreedspecificratesforpartici-pantstotheIDIconference:Hotel Brunelleschi *****: www.hotelbrunelleschi.it , Piazza Sant'Elisabetta 3. Please send an emailat: [email protected]:+3905527370specifyingthatyouwillattendte IDIannualconference2018.TheroomsshallbebookedwithinMarch31,2018.HotelPlusFlorence***:https://www.plushostels.com/it/plusflorence,viaS.Caterinad'[email protected]+390556286347specifyingthatyouwillattendteIDIannualconfer-ence2018.TheroomsshallbebookedwithinApril30,2018.Grand Hotel Cavour ****: http://www.albergocavour.it/, via del Proconsolo 3. Please send an emailat:info@albergocavour.itinordertobookingyourroom.ThehoteldoesnothaveaspecificrateforIDIconference.Please,beinformedthatseveralothereventswilloccurinthesameperiodoftheIDIconference,thereforewekind-lysuggestyoutobookyourhotelassoonaspossible.