On 8 October 2019, the French Competition Authority ("FCA") sanctioned Procter & Gamble ("P&G"), Coty and Chanel, as well as their wholesalers, €176,000 for having implemented exclusive import agreements in overseas territories.
| what you need to know - key takeaways |
- Since March 2013, the Luren law has prohibited exclusive import agreements in French overseas territories.
- These agreements remain an active area of enforcement for the FCA, with the present case being the seventh such decision.
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In November 2017, the FCA received a complaint regarding exclusive import agreements in the perfumes and cosmetics distribution sector in French Antilles, French Guiana and on the Reunion Island having been implemented after the entry into force of the Law on Economic Regulation in French overseas territories (known as the "Lurel Law") of 20 November 2012. The Lurel law, whose purpose is to address the specific competition law issues of those territories (i.e. insularity, concentration of markets, entry barriers, etc.), prohibits exclusive import agreements as of 22 March 2013.
In French Antilles and Guiana, P&G and its wholesaler (Parfumerie d'Outremer) maintained exclusive import rights regarding products of certain P&G brands after this date and until February 2014. Then, Coty acquired these brands and granted Parfumerie d'Outremer similar rights. Therefore, each of these companies has been sanctioned by the FCA for having maintained or established exclusive import rights.
On the Reunion Island, the wholesaler of Bourjois' products (Sodibel) benefited from exclusive import rights until January 2014 – being specified that although at the time of implementation of the practices, Bourjois was owned by Chanel, its activity has then been transferred to Coty. In this context, the FCA sanctioned Chanel as Bourjois' former parent company and Coty as the buyer of Bourjois. Sodibel was also fined for these practices.
Fines were imposed by the FCA in accordance with the terms of the settlement procedure for which each company concerned applied and amounted to a total of €176,000.
This is the seventh decision sanctioning exclusive import agreements regarding French overseas territories issued by the FCA since the entry into force of the Lurel law, other sectors concerned being the distribution of consumer goods, medical biology products, and termite traps.
Finally, it should be noted that Sodibel had already been sanctioned by the FCA for the implementation of practices of similar nature regarding the distribution of dessert products in July 2017.
With thanks to Marie Florent of Ashurst for her contribution.
