Micheál Martin (Cork South Central, Fianna Fail)

I welcome the first opportunity to answer Deputy Quinn's queries on Question Time and hope we will have constructive engagement in the context of his portfolio.

My attention has not been drawn specifically to this matter. However, the Competition Act 2002 prohibits anti-competitive arrangements between undertakings and the abuse of a dominant position by undertakings. The Competition Authority was established by statute and one of its functions is to enforce the Act. It is also empowered to apply Articles 81 and 82 of the EU treaty as well as national competition law provisions where the agreement or conduct being examined may have an effect on trade between member states.

It would appear the products referred to in the question are distributed throughout the EU under exclusive distribution-type agreements. The main feature of such sole distributor or exclusive distribution agreements is that the manufacturer or supplier generally agrees to supply certain goods for resale to only one party, the exclusive distributor, within a defined territory and no other party will be supplied with the goods within that area.

Generally, competition law does not prevent manufacturers, wholesalers or retailers from entering into or concluding exclusive distribution agreements. European and Irish competition law permits such agreements, provided certain conditions are met, on the grounds that the beneficial aspects of such agreements outweigh their anti-competitive effects. The relevant guidance for making this assessment where there is an effect on trade within the European Union is contained in EC Regulation 2790/99 and the accompanying EU guidelines on vertical restraints. Where the effects of the agreement are confined to the State, the Competition Authority's declaration in respect of vertical agreements and concerted practices applies. The authority's website, www.tca.ie, provides comprehensive information in this regard.

I accept that prices for similar products continue to differ significantly across the European Union despite the existence of the Single Market. Competition law cannot prescribe how a particular company determines how to distribute or price its products throughout the EU, which remains the prerogative of the individual firm. Price differentials between geographic markets may occur for a variety of reasons. For example, local supply and demand conditions and the number and type of competitors in each market may differ. Further differences might exist in marketing, distribution and transportation costs or the degree of rivalry among competitors in local markets.

However, I understand the EU Commission and courts have previously considered and ruled on matters such as restrictions on passive selling by distributors in an exclusive distribution network. Therefore, I would encourage anyone who feels aggrieved as a result of such an exclusive distribution agreement to contact the Competition Authority or the Commission directly.

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