Quenchers Ltd (“QL”) is a manufacturer of soft drinks incorporated in England. Its
core business is lightly flavoured sparkling waters and it sells a variety of fruit flavours
under its “Quench” brand. The drink is made from organic ingredients and uses only
natural spring water. QL have so far operated only within the UK market, and have a
25% share of the market for sparkling water. However they feel they have an
excellent product that could be successfully marketed throughout the rest of Europe.
They therefore initially enter into negotiations with a company from Germany (“GR”) to
buy and then resell its Quench drinks in the German market.
Following negotiations, it has been agreed that QL will enter into a 3 year agreement
with GR on the following terms:
1. QL will not appoint any other distributors within Germany nor will QL compete
directly within the German market;
2. GR will not sell the drinks outside Germany;
3. GR is prohibited from selling drinks made by any manufacturer other than QL.
4. GR agree to sell the drinks only at prices previously notified to it by QL
Analyse the proposed terms and explain the extent to which they infringe
A few years on and QL’s expansion into Europe has proved extremely successful with
their Quench drinks selling throughout the EU. QL now has 50% of the EU market for
sparkling water, but only 5% of the market for soft drinks generally.
QL receives an inquiry from a new customer, Tienda Fresca, a supermarket retailer
with 20 outlets in Spain. In order to maximise sales to customers, QL has decided
that all orders of Quench from new customers will only be met if the customer also
orders a minimum quantity of QL’s still cordial range as well. Tienda Fresca wishes to
purchase only the sparkling Quench range.
Advise whether QL’s actions may be challenged under Article 102 TFEU.
Advice on answering eTMA03
In this assignment we are looking for you to demonstrate that you have met the
assessment criteria in the following ways:
Knowledge and understanding
Demonstrate that you understand the law on which marketing arrangements are
based and the consequence of including certain types of term in a marketing
arrangement. Show that you understand the impact of EU competition law on this
area. Explain the problems which parties to the agreement will face and the
consequences of breaching A101 and A102 TFEU.
Exercise skills of analysis in working out what law is needed to answer a question and
assessing provisions of particular legislation. Show your ability to form and express
an opinion on possible problems. Demonstrate assimilation of the factual and legal
material and present a logically coherent view of the materials studied.
Practical and professional skills
Organise your answer and use sub-headings appropriately. Use problem solving
skills and cite authority accurately where relevant.
The key skills that you need to demonstrate in this eTMA are the ability to address a
legal problem and present your solution to it in a clear, easy to read style. Your
answer should be well-structured, written in clear English, and easy to understand.
The answers to Questions 1 and 2 of eTMA 03 will be marked as a whole. However,
as Question 1 requires consideration of four contractual terms, you should expect the
answer to Question 1 to be far longer than that for Question 2.