Marketing Arrangements - Agents

Marketing Arrangements - Agents

Introduction

Porkers Ltd (PP) is a company that breeds rare-breed pigs on farmland in Suffolk and from them produces top-quality pork products, including their increasingly well-known Premier Porkers Prime-Cut Organic Sausages, for sale to the retail sector. The company enters into negotiations with wholesale companies in Wales and Scotland to buy and then resell its sausages to retailers in their respective countries. After negotiations it has been agreed that PP will enter into 10 year agreement with the Welsh (WA) and Scottish (SC) companies on some terms. We will evaluate the terms of negotiation in the light of Competition Act of 1998. After discovering that the selling targets for south-west England have not met, PP decides to appoint Phil Sharp to work full-time as a self-employed agent selling PP's sausages in Cornwall and Devon. It is agreed that Phil will have the ability to negotiate contract terms and conclude contracts with retailers on behalf of PP. We will be reviewing if the Commercial Agents Council Directive Regulations of 1993 is employable in the hiring of Mr. Phil. Later on unhappy with Phil's performance as the sales of sausages are still well below expectation, PP decides to terminate the agreement by giving Phil three months notice in accordance with the contract to avoid paying damages for breach of contract, and presumes this will be enough to avoid having to pay anything further to Phil. The agreement contains no other provisions regarding the effect of termination. We will consider the possibility if Mr. Phil is entitled to any more compensation in this regard as per law.

Discussion

The accord breaches many laws of competition act and will result in the PP, WA and SC to be charged 10% of their total annual turnover year on year for the violations. Following are the explanation main features of the law:

The anticompetitive behaviour is elaborated as such activities which cause harm to the interests of the public or rival companies. Anti-competitive activities can come in many structures. Any decisions or accords or concerted practices that are against competition are forbidden under competition regulation in both EU and the Ireland.

The regulation does not forbid all decisions, accords or concerted activities: only those that are damaging to customers or rival firms. Those that intimidate to increase prices to customers or limit production are believed to be principally detrimental.

Competition law has established that some hard-core accords among rivals are for all time damaging to customers. A cartel is an illegal accord among two or more rivals not to compete with each other. Cartels normally engage in a clandestine plot among many businesses.

Those individuals and companies established responsible of hard-core cartel crimes face multiple penalties, including fines and jail rulings. Other accords that are not measured to be hard-core cartels may infringe competition law anywhere they have anti-competitive results. Examples include; accords among firms those are not rivals but are related throughout a supply chain of sharing, e.g. distributors and manufacturers, retailers and distributors, ...