The European Court of Justice rules on the parallel imposition requirement in exclusive distribution networks: the importance of evidence

On 8 May 2025, the European Court of Justice (“ECJ”) gave its preliminary ruling in the Beevers Kaas v Albert Heijn dispute, a case concerning the interpretation of Article 4(b)(i) of the 2010 vertical block exemption (Reg. no. 330/2010) (the “2010 VBER”). The decision contains important clarifications on the steps suppliers operating exclusive distribution networks should take to fulfil the so-called “parallel imposition” requirement and ensure compliance with European competition law. Absent such steps, a supplier cannot rely on the ability to enforce active sales restrictions in territories or to customer groups that have been exclusively allocated to another party. 

The parallel imposition requirement requires suppliers operating an exclusive distribution system to protect any distributors that have been exclusively allocated to a territory or customer group against active sales from all of the supplier’s other distributors within the European Union. 

While the parallel imposition requirement itself is nothing new, this is the first time the European Courts have provided guidance on the steps a supplier needs to take to fulfil this requirement. Little wonder then that the ruling, together with the Opinion of Advocate General Medina in January of this year, has attracted a lot of attention in competition and distribution law circles. The steps required to fulfil the parallel imposition requirement and qualify for block exemption may go beyond what is often applied in practice.    

While many of the headlines relating to European antitrust enforcement in recent years have concerned digital markets and European resilience, the ruling is a timely reminder – particularly for companies in more “traditional” sectors, such as FMCG – that the rules on vertical restraints remain an important (and difficult) area of European antitrust enforcement.

Background of the preliminary ruling 

The case arose from a dispute between Beevers Kaas BV (“Beevers Kaas”) and Albert Heijn België NV, Koninklijke Ahold Delhaize NV, Albert Heijn BV, Ahold België BV, (“Albert Heijn”), two distributors of Beemster cheese produced by B.A. Coöperatieve Zuivelonderneming Cono (“Cono”).

Beevers Kaas initiated proceedings against Albert Heijn for having engaged in unfair trade practices in violation of the Belgian Code of Economic Law. Beevers Kaas argued that Cono had granted them the exclusive right to distribute Beemster cheese in Belgium and Luxembourg pursuant to a contract concluded in 1993, and that the distribution agreement therefore prohibited Albert Heijn from actively distributing Beemster in the same territory. 

At the heart of the dispute is whether the exclusive distribution agreement between Beevers Kaas and Cono complies with competition law and can be exempted under the first exception listed under Article 4(b)(i) of the 2010 VBER. Article 4(b)(i) provides that exclusive distribution systems satisfying certain criteria can be excepted from the general principle that restrictions on the customers and/or territories to whom a distributor may sell amounts to a ‘hardcore’ restriction of competition and is therefore ineligible for block exemption.

One of the criteria that must be met for an exclusive distribution network to qualify for block exemption (in addition to both the supplier’s and buyer’s market shares being below 30% on the respective supply and purchasing markets) is fulfilment of the parallel imposition requirement (described above), and it was the interpretation of this requirement, and specifically the steps that needed to be taken in order for this requirement to be deemed to have been fulfilled, that the ECJ had been asked to give guidance on. 

Beevers Kaas argued that the parallel imposition requirement was met insofar as Albert Heijn had implicitly acquiesced to an active sales ban by not actually selling in the territory. Conversely, Albert Heijn argued that the agreement was not exempted under the 2010 VBER as Beevers Kaas also needed to prove that Cono had communicated to all other resellers that they were required to comply with the exclusive agreement for the specific territory.

Considering that the 2010 VBER and the 2010 Commission Guidelines are silent on the steps a supplier should take to protect its exclusive distributors from active sales by other buyers, the Belgian court referred two questions to the ECJ, which were rephrased by the ECJ as follows:

1. Where a supplier has allocated an exclusive territory to one of its buyers, is the mere finding that the other buyers of that supplier do not engage in active sales in that territory sufficient to establish the existence of an agreement between that supplier and those other buyers concerning the ban on active sales in that territory for the purpose of applying Article 4(b)(i) of 2010 VBER?
2. Is the benefit of the exception provided for in that provision granted for the period for which it is shown that there is acquiescence by a supplier’s buyers to the supplier’s invitation not to make active sales in the exclusive territory allocated to another buyer?

The ECJ’s preliminary ruling

The ECJ largely followed Advocate General Medina’s Opinion of 9 January 2025.

On the first question, the ECJ held that the mere finding that other distributors have not engaged in active sales in the exclusive territory is not sufficient to fulfil the parallel imposition requirement. 

In order to satisfy the requirement, the ECJ lays out a two-step test underpinned by the EU case law on the component parts of an ‘agreement’ under Article 101 TFEU: (i) first, a supplier must invite “in any form whatsoever” distributors not to engage in active sales in the exclusive territory; and (ii) second, distributors must expressly or implicitly acquiesce to the invitation. Building on Advocate General Medina’s Opinion, the Court made clear that these two steps can be satisfied on the basis either of direct evidence or on the basis of “objective and consistent indicia”, from which it can be inferred with sufficient certainty that the above two steps have been satisfied.

As noted by the Advocate General in her Opinion (and endorsed by the ECJ), ‘direct evidence’ of an agreement might include:

• an explicit clause in all distributor agreements restricting (or reserving a right to restrict) active sales into the relevant exclusively reserved territories or customer groups; or
• a clause reserving the supplier’s right to impose active sales bans on exclusively reserved or allocated territories or customers in its distribution agreements with other distributors, which is expressly updated whenever required and enforced.   

By contrast, a tacit agreement on the basis of objective and consistent indicia could be inferred where the supplier had asked its distributors to comply with an active sales ban (and such requests were not envisaged in the distribution agreement), and the suppliers had accepted that request (either explicitly, e.g., by way of an exchange of correspondence, or implicitly, e.g., by subsequently accepting general terms and conditions containing the active sales ban).   

The Court went on to clarify that the mere fact that distributors have not made active sales into an exclusive territory is not, by itself, sufficient to demonstrate an agreement to restrict active sales (even where those distributors were aware that the territory had been exclusively reserved to another distributor). The ECJ took the view that while the fact that distributors had not made active sales into an exclusively reserved territory might contribute to an inference of tacit acquiescence, it would not by itself be sufficient to establish inferences that: (i) the supplier had invited distributors not to engage in active sales; or (ii) the distributors had decided to not make active sales into the territory in acquiescence of the supplier’s invitation. The Court did, however, suggest such restraint could amount to tacit acquiescence where the supplier in parallel takes certain steps to monitor and enforce the restriction. While this observation closely follows the wording in paragraph 25 of the 2010 Guidelines, our view is that the setting up of monitoring and enforcement mechanisms are better analysed as indications of a possible ‘invitation’ on the part of the supplier.

On the second question, the ECJ found that the exclusive distributor will benefit from the protection only for the period for which the exclusive distributor can prove that there is acquiescence by the other distributors to the supplier’s invitation not to make active sales in the exclusive territory. 

No consideration of effects?

The ECJ’s ruling does not consider the parallel imposition requirement from an effects perspective. This is expected given that the vertical block exemption intends to establish clear cut rules that can easily be followed. Nevertheless, it would have been helpful had the ECJ given some indication of economic considerations which could be relevant when considering the parallel imposition requirement outside the block exemption context (i.e., under Article 101 TFEU). For example, would there be scope under Article 101 TFEU for a supplier to show that a failure to impose an active sales ban on all relevant distributors does not impact the exclusive distributor’s ability to generate efficiency gains? Alternatively, could a supplier justify a failure to impose an active sales ban on certain distributors on the basis that they had reasonable grounds for reaching the view that those distributors had no intention of making active sales into the exclusively reserved territory or to the exclusive customer group? 

Adjustments necessary under the new VBER? 

Although the case was assessed pursuant to the 2010 VBER, the ECJ’s findings have similar implications for the current vertical block exemption (Reg. no 2022/720) (the “2022 VBER”) and accompanying Guidelines, which equally impose a parallel imposition requirement. The novelty under the 2022 VBER that a supplier can have up to five exclusive distributors in a given territory does not impact the need to evidence compliance with the parallel imposition requirement.

Practical implications for suppliers and distributors

The ECJ’s ruling provides guidance on the practical requirements for an exclusive distribution network to benefit from the vertical block exemption. 

Suppliers should: 

1. Ensure that other buyers/distributors are aware and have agreed not to engage in active sales in such a territory/to such a customer group by inserting a clear ban on active sales (but not passive sales) into territories and/or to customers allocated to exclusive distributors in distribution agreements concerning EEA territories.

1. Ideally, include a list of territories and/or customers that have been exclusively allocated to other distributors as an annex in all distribution agreements concerning EEA territories, or otherwise provide for other means of notifying distributors of the territories and/or customers that have been exclusively allocated (e.g., by email notification) and ensuring that any changes to your exclusivity arrangements are properly notified to all distributors. 
2. Regularly review your distribution agreements and compliance with the parallel imposition requirement including by keeping an up-to-date record of exclusivity granted, notifications sent, and responses received. 
3. Relatedly, inform all buyers involved in the distribution network of any changes to the exclusive arrangements as soon as practicable, and always in a timely manner.
4. Keep track of all the changes in writing.  

The ECJ’s ruling highlights the difficulty in setting up and maintaining exclusive distribution networks in the EU that meet the conditions under VBER and are exempt from Article 101(1) TFEU. National competition authorities within the EEA, as well as the CMA in the United Kingdom (where parallel imposition is also a condition of block exemption), are unlikely to interpret the parallel imposition requirement more leniently.