A firm prohibits its distributors from selling competitors' products.
a condition of a contract by which a manufacturer does not allow a retailer to sell goods made by a competing manufacturer.
System by which a manufacturer forbids an intermediary to carry products of competing manufacturers. p. 372
Under the Restrictive Trade Practices Act 1976, agreements within the UK which would impose restrictions as to price, terms and conditions, supply, manufacturing processes or potential customers must be notified to the Office of Fair Trading. However "exclusive dealing" arrangements such as exclusive supply arrangements and intellectual property licences are commonly exempt if the agreement concerned does not contain certain prohibited restrictions.
Exclusive dealing refers to when a retailer or wholesaler is â€˜tiedâ€™ to purchase from a supplier on the understanding that no other distributor will be appointed or receive supplies in a given area. When the sales outlets are owned by the supplier, exclusive dealing is because of vertical integration, where the outlets are independent exclusive dealing is illegal due to the Restrictive Trade Practices Act, however, if it is registered and approved it is allowed.