Monday, 26 April 2010

Luxury Goods Makers Can Block Online Retailers Thanks To The E.U. – 26/4/10

The European Commission ruled last week that suppliers of luxury goods will be able to block retailers, like eBay and Amazon, which only sell products on the Internet.

According to The New York Times, “Under the rules, makers of goods that have less than a 30 percent share of the market would essentially have a free hand to decide how to distribute and sell their wares.“

In a summary of the rules, which go into force in June and last for 12 years, the commission said “suppliers should normally be free to decide on the number and type of distributors they want to have in their distribution systems.” It added: “More generally, suppliers may only want to sell to distributors that have one or more physical points of presence (‘brick and mortar’ presence) where the suppliers’ goods can be touched, smelled, tried, etc.”

It’s early days yet, but these rules seem to be a victory for companies like LVMH, who have been in an ongoing war with eBay (see our earlier report for details). As Guy Salter from the European Alliance (a group representing luxury goods associations like LVMH, Gucci and Burberry) said, it is important that “the quality, service and authenticity of luxury products will be maintained.”

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Melinda O’Rourke is the founder and Director of MO Luxury, a dynamic, Sydney-based management firm specialising in luxury brands and services. Melinda and her associates at MO work with local and international brands across prestige retail, fashion, fine jewellery, timepieces and specialised services. Melinda is well-connected, well-read, and well-versed in the demands of the luxury market and its client base. Her advice is firmly based in objectivity and ultimately, accountability. Melinda offers constructive counsel and both strategic and creative thinking and is able to draw upon a strong network of specialised talent to compliment the MO Luxury team as needed. Melinda enjoys excellent industry relationships and is regularly quoted in the business and fashion media. Read more about MO Luxury,