IDI CONFERENCE 2017 Paris, 9-10 June 2017 Adapting distribution to a changing environment Developing new e-commerce strategies Establishing a direct relation with consumers We have assisted in the last years with important changes to distribution strategies around the world. The changes mainly relates to the growing importance of the Internet (e-commerce, m-commerce, sales through apps, internet platforms, etc.), which opened new spaces to manufacturers for creating a direct relation with the final customer (with an impact on their distribution networks) and, at the same time, created new chances for the members of the networks to get to new customers (with an impact on the manufacturer and on the other members of the network). Companies can no longer avoid developing their best distribution strategies and should be aiming at overcoming problems of competition with their networks, keeping the reputation of their brands at a high level, solving problems of logistics, return of products and similar problems.
Wehave assisted in the last yearswith important changes to distribution strategiesaroundtheworld.Thechangesmainly relates to thegrowing importanceof the Internet (e-commerce,m-commerce,salesthroughapps,internetplatforms,etc.),whichopenednewspacestomanufacturersforcreatingadirectrelationwiththefinalcustomer(withanimpacton their distribution networks) and, at the same time, created new chances for themembers of the networks to get to new customers (with an impact on themanufacturerandontheothermembersofthenetwork).Companiescannolongeravoiddevelopingtheirbestdistributionstrategiesandshouldbe aiming at overcoming problems of competitionwith their networks, keeping thereputation of their brands at a high level, solving problems of logistics, return ofproductsandsimilarproblems.
Consequently, themain sessionof the2017 IDIConference (Friday June, 9th)will bedevoted to newways of distributing in the era of e-commerce,m-commerce, salesthroughapps,internetplatforms,etc.
At the endof themain sessionwewill dealwith the IDI arbitrationproject (IDArb),which intends to facilitate arbitration in distribution disputes through a system ofexpeditedarbitrationandalistofarbitratorshavingspecificexperienceinthefieldofdistribution.ThethreeworkshopsofSaturdaymorning(June10th)willdiscussthefollowingissues:
(i) Growing constraints to freedom of contract in agency, distributorship andfranchisingcontracts.Possibleremediesand/oralternatives.
(ii) DistributinginChina.(iii) Rebrandingandchangingtheknow-howinfranchiseagreements.
09:30-09:50 NewtrendsandopportunitiesfordistributionintheInterneteraWhilewehavebeendealinglastyearinTorinowithInternetsalesingeneral,wewilldealtodaywith some further developments: promotion through social media and sale (Wechat); salethrough marketplaces; global approach - omni-channel strategy (click-n-collect); advancedsolutionsregardingdelivery.
09:50-10:10 Thecustomerjourney.FromdiscoverytopurchaseandadvocacyItusedtobesimpleandstraightforward:ashopexpeditionorashoppingsearch. It isnowamuchmorecomplexanddiverseprocess,a journey that involves thephysicaland thevirtualworld, where the consumer meets and interacts with new market players, like bloggers,infomediariesandgroupsofinfluencersinsocialmedia.Itcanbeaverylongprocess,involvingmanyphysicalandvirtualinteractions,butitcanalsobeasuddenandserendipitousdecision.Anew market environment that raises many difficult questions both for manufacturers andretailers.
10:10-10:30 Anexampleoffullintegrationbetweene-commerceandsocialnetworks:WechatWechat is the first example, operating inChina, of a full integration between on-line sales,instant messaging and social networks: moving from a communication app to a wholeecosystemcurrently adoptedby: (i) 90%of globalbrands; (ii)more than95%of smartphoneowners in China.Wechat nowmanages more than 1.000.000 transactions per minute, as aproof that instant messaging is becoming the standard for mobile internet and mobilecommerce. Facebook Messenger and other major players are going quickly in the samedirection,how this new global trend is impacting (and will impact in thefuture) businessesaroundtheworld?Howshouldbrandsreacttothistoleverageitatitsbest?
10:30-11:00 Distributingthroughon-lineplatforms:themanufacturer'sperspectiveWhat is the definition of on-line platforms? Platforms, e-tailers, marketplaces, etc. On-lineplatforms as service/logistic/advertisement/SEO providers. What are the main contractualsolutionsproposedtomanufacturers:resaleofproductsbythee-tailervs.hostingagreements(main differences between the two options, and pros and cons formanufacturers). Possibleintegrationswiththemanufacturerssalesnetwork.
directlyorthroughonlineplatforms,whatarethemainissuesandconcerns?ThisQ&Asessionwilldealinparticularwithissuessuchas(i)howbrandstrytolimitinternetsalesofresellers;(ii)how Amazon and eBay works and treats resellers; (iii) how brands compete with resellersonline;etc.
11:50-12:20 Draftingdigitalguidelinesforonline/offlinedistributorsIn order to manage and coordinate distributors in dealing with internet sales, promotion,advertisingetc.,mostofthecompaniesarenowcreatingasetofguidelinesaddressedtotheironline and offline distributors regulating the mainissues (advertising; display ofproducts/photos; adwords; etc.). Sometimes these provisions are part of a (selective)distributionor franchiseagreement; inother cases, theyare simplyproposedasnon-bindingguidelines.Thespeakerswillexplainthetypicalcontentsoftheseguidelinesandexchangetheirviewsonthisnewapproach.
12:20-12:40 Anewdevelopment:"uberization"ofdistributionUberization means the operations of individuals who compete with professionals.Consideration of the Organization of distribution and of case law in this field shows thedevelopmentofconsumerresalestootherconsumers.Afirstissueiswhataretherulesapplicabletosalesc/c:Shouldtheconsumer-resellerbedealtwith like an individual or like a professional, and should the buyer be dealt with like anindividualorlikeaconsumer?A second issue is how tomanage the relationship between the supplier and the consumer-reseller. Sometimes the supplier tries to improve resales by the consumer-reseller throughattractive conditions of sales in order to benefit from the consumer’s acquaintances.Sometimes the supplier tries to prevent or limit such resales to protect the network of itsdistributorsandmorewidelytoavoidsupplyingthegreymarket.
14:30-15:00 PANEL:Developinganomni-channelstrategyIntegratingexistingdistributionnetworkswithon-linesaleshasseveraladvantages,whicharemore andmoreevident to companies, from thepointof viewof logistics, custom, after saleservicesandreturnofproductsand–mostimportant–limitingthecompetitionbetweenthemembersof thedistributionnetwork.Thepanellistwillsharetheirexperiencesof integrationbetween distribution networks, whichmay affect thewhole sale and/or the retail brick andmortarnetwork.
15:00-15:30 Anessentialaspecttocopewith:logisticsThe choice to sell directly to end users, avoiding traditional distribution systems entailsprimarilyaproblemoflogistics,whichissolvedbysomemanufacturersbyusingthirdparties’logisticstructures.Contractingfortheprovisionoflogistics–acasestudy-thelogisticsserviceprovider agreement. As regards possible returns of products, what of goods which arereturned? Can internet retailers benefit from how such agreements address the issue ofreturns?
Edward Miller, Reed Smith, London and Paris; IDI agency & distribution countryexpertforUKStephenSidkin,FoxWilliamsLLP,London
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15:30-16:00 Coffeebreak
16:00-16:40 Facilitating the recourse to arbitration for distribution disputes. The IDArbexpeditedprocedurerulesandthelistofarbitratorsspecializedindistributionIDIhasdevelopedanewprojectonarbitrationwiththeSwissChambersArbitrationInstitution(SCAI)andtheChambredecommerced'industrieetdeservicesdeGenève(CCIG)withtheaimof(i)establishingandmanagingalistofarbitratorshavingaspecificexperienceinoneormorefields of distribution law; and (ii) tailoring an expedited and cost-effective arbitrationprocedure,managedbySCAIundertheSwissRulesofArbitration,speciallyadaptedforsmalldisputes in the field of distribution, for which at present the recourse to internationalarbitrationisconsideredtobeinappropriate.
The IDArb project will be presented by the following members of the selectingcommittee:Jean-PaulVulliety,Lalive,Geneva,ChairofIDArbFabioBortolotti,BuffaBortolotti&Mathis,TorinoStefanoCatelani,DupontdeNemoursInternationalSA,GenevaIgorSanJuan,Swarovski(Europe)HoldingB.V.,AmsterdamVincentSubilia,PresidentoftheSwissChambers'ArbitrationInstitutionJaapvanTill,Loyal,Amsterdam
16:40-17:00 Discussion
GeneralMeetingofIDImembers 17:00-18:00Atthisgeneralmeeting,towhichnonmembersarealsoinvited,theofficersofIDIwillinform themembersabout the current situationof IDI, the resultsachieved in2016andtheplansforthefollowingyears. The participants will be kindly invited to share their views and opinions about theactivityofIDIandmakesuggestionsforthefuture.
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Saturday10June
WorkshopsSession 09:30–12:30Workshop1: Is traditionaldistributionstill theappropriatesolution?Growingconstraintstofreedomofcontractandpossibleremediesand/oralternatives.National lawmakers are increasingly limiting party autonomy to freely choose the mostappropriatesolutionsfortheirbusiness.Thisapproachisdueontheonehandtothetrendtoextend principles of consumer protection from B2C to B2B and on the other hand to thegrowingprotectionofsocalledweakerparties(agents,franchisees,distributors).Thisworkshopwillexaminetheabovetrendsanddiscusspossibleremediesand/oralternativesolutions,intheinterestofmanufacturers/suppliers.
09:30-09:50 IntroductionManufacturers are faced with growing constraints in organizing their relations withcounterparts in distribution. When dealing with agents, they need to cope with rules onperiods of notice, goodwill indemnity, etc. which type of protection is extended in severalcountries to distributors/resellers and franchisees. Recent reforms of contract law aredeveloping additional limitations, as regards the validity and effectiveness of standardcontracts,requirementsofpre-contractualinformation,validityofnon-competeclauses,etc.Partiesmust be aware of these limitations and evaluatewhether they can overcome suchconstraints or look for alternative solutions. The purpose of this conference is precisely toanalysethemostcriticalissuesandtodiscusspossibleremedies.
09:50-10:20 Can standard clauses in distribution contracts signed by the counterpart beconsideredasabusive?Distribution contracts (agency, distributorship, franchising) are commonly based on astandard form prepared by the principal/supplier. If the counterpart does not discuss thestandard form can its clauses be challenged? And, if the standard form is discussed andamendmentsarenegotiated,cantheremainingclausesbechallenged?ThesolutionsadoptedintheUnidroitPrinciplesandnationallaws:France(underthenewcivilcode)andGermany.Possible remedies: choice of the law of a more liberal country (e.g. Swiss law instead ofGermanlaw).
MarcelFontaine,UniversitécatholiquedeLouvain,Louvain-la-NeuveBurghard Piltz, Ahlers & Vogel, Hamburg; IDI distribution country expert forGermany
10:20-10:50 Isitstillpossibletostipulatepost-contractualnon-competitionclauses?Post-contractual non-competition clauses may be of paramount importance in certainsituations. Since they limit the freedom of the counterpart, legislators tend to imposelimitations as to their validity. An overview of national laws limiting post-contractual non-competitionclauses.HowtodealwiththelimitationsofEUcompetitionlaw,inparticularbyinvokingthedeminimisrule?Howtoenforcenoncompetitionobligations.
Ingrid Meeussen, LVP Law, Brussels; IDI agency & distribution country expert forBelgiumGinevraBruzzone,DeputyDirector-General,Assonime,Rome
10:50-11:10 Coffeebreak
11:10-11:30 Dealingwithlong-standingrelationshipswithresellerswithoutwrittenagreementUnwrittenagreementswithresellers(distributors,importers)areverycommon,inparticularwhen the agreement with a buyer-reseller gradually develops to a true distributorshipagreement (see the Corman-Collins and Granarolo judgments of the EU Court of justice).When this is the case the distributor will in most cases be able to bring a claim forcompensation/goodwill indemnity before the courts of his country.Whatmeasures can betakenbysuppliersinordertoavoidorminimizethisrisk?
Jean-PaulVulliéty,Lalive,Geneve
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11:30-12:00 Convertingdistributorsintocommissionagents(commissionaires)In some countries, manufacturers have started to include commissionaires instead ofdistributors.ThistypeofsolutionischosenalsofortaxpurposesInordertolimitcompetitionwithin distribution networks and considering the restrictive approach followed by someantitrust authorities (particularly within the European Union) on exclusive and selectivedistribution,andisnotsuitableinallcountries.Whataretheprosandconsofthiscontractualsolution?
Jaap Van Till, Loyal, Amsterdam; IDI agency & distribution country expert forNetherlandsCyrilChristiaans,DLAPiper,Amsterdam
12:00-12:30 AvoidingoverridingmandatoryrulesthroughachoiceoflawandchoiceofforumPrincipals/supplierswhowanttoavoidmandatoryrulesofthelawofthecounterpart(agentdistributor) usually agree to submit the contract to their own law and their own courts. Inrecentyearsanumberofcourtsdecidedthatforumselectionclauseswhichhavetheeffectofexcluding the application of mandatory rules protecting the local counterpart can bedisregarded by the courts of the latter. Which developments can be expected in variouscountries?CantheabovetheorybeappliedwithintheEUunderregulation1215/2012?
Workshop2:DistributinginChina.China is one of the main market considered by foreign companies as a target country fordistribution. There are several ways to approach such a market: on-line sales; localdistribution;crossbordertrade;commercialagency; franchising.Theaimofthisworkshop isto analyse possible means for getting to Chinese customers as well as the most commonproblemsencounteredbyforeigncompaniesdistributinginChina.
09:30-09:50 OnlinedistributioninChina:abetterchoiceforapproachingsuchabigmarket?On-line sales are growing extraordinarily in China. The traditional approach followed byforeign companies to enter into this market showed some difficulties specially for smallercompanies: Chinese trade companies, representing several (and also competing)manufacturersseemtobemorefocusedinmostimportantbrands,withoutgivingthesamesupporttosmallerproducers.Whatcanbetheadvantagesofchoosingtheon-linechannel?Whatare the investmentcostsand feasiblesolutionsalso forsmallercompanies?Whatarethemainissuestodealwith(e.g.logistic)andthebestcontractualsolutions?
ClaudioFerraris,Milioone,Milan
09:50-10:10 CrossborderdistributionandcoordinationbetweenofflineandonlinesalesWhen making the choice of the distribution strategies to implement in approaching theChinese market, it is essential to clearly coordinate the different ways to distribute,consideringpromotionalandadvertisingcosts,logistics,etc.Theroleofthelawyerisessentialinthesedecisions,inordertoavoidproblems.
10:10-10:30 CopingwithantitrustrulesAnimportantissuethatshallnotbeunderestimatedwhenenteringtheChinesemarketisthecompliancewiththePRCAML(AntiMonopolyLaw),whichinfacthasseveralrestrictiverulesapplicabletodistributioncontracts.Theantitrustlegalregimehasbeenbuiltupwithcertainlevel of complexity by relevant regulators. Additionally, one should recognize that legalenforcement in mainland China is often uneven and unpredictable, which means lots ofuncertainty and speculative risks formarket participants.What are themain aspects to beconsideredwhenadaptingtheinternationalcontractstoChineseLaw?Whataretherulesandpolicies followed by the enforcement authorities?What are preferred practices for foreigncompanies?
11:00-11:20 AdaptingfranchisesystemstotheChinesemarketWhatarethemainissuesforforeignfranchisorsenteringtheChinesemarketandinadaptingtheinternationalfranchisemodelcontracttotheChineserules?WhatisthecorrectnameofyourChineseparty,andhowtoconductduediligenceinChina?WhydotheChinesepartieswant touseaHongKongcompanyandhowdoes itaffectyou?ShouldyouhaveaChineseversion of your trademark, and if so how to develop one?How can you getmoney out ofChina? Do Chinese courts work or should you use international arbitration? Should youauthorize my Chinese franchisee to conduct e-commerce? What are the problems withbecomingregisteredwiththegovernment?
Workshop3:Rebrandingandchangingknow-howinfranchising.Theneedofthefranchisortochangetheknow-howorthebrandofthefranchisesystemisappearingmore andmore frequently, for the needs of the changingmarket environment aswell as in case ofmergersandacquisitions.Ofcoursethisdecisionisalwaysdifficulttobeimplemented,despitepossiblecontractual clauses provided in this respect (the validity and effectiveness ofwhich is also sometimechallenged).Howcanthissituationbefacedandsolvedinthebestwaybyfranchisors?
CHAIR Didier Ferrier, Professor of Law, University of Montpellier; Vice-President IDI, IDIcountryexpertforFrance
09:30-09:50 IntroductionChanging the brand, changing the know-how: what are the typical reasons for proceedingwithsuchachangeandwhatarethemaindifficultiesfortheparties involved.Ofcourse, inadditiontotheconsequencesofsuchadecisionforthemarketandcustomers,severalissuesarise intherelationshipwiththefranchisees,whichmaychallengethedecision,statingthattheyhaveinvestedinthe“old”brand,etc.
09:50-10:10 Theneedtoconstantlydeveloptheknow-howandbusinessmodelInordertokeepupwiththeconstantchangeandadaptationsofthemarket,franchisorsneedtoconstantlyupdateandmodifytheirknow-howandbusinessmodel;suchchangesaremadefor the benefit of the whole franchise network, but in some cases they are hampered byfranchisees. The speaker will share with the participants his experience with Yves Rocher,whichisnowatitssixthversionofitsbusinessmodel.
GuyGras,YvesRocher,Paris
10:10-10:40 PANEL:RebrandingprovidedforinthefranchiseagreementAssuming that the franchise agreement allows the franchisor to change its brand and theknow-how,wouldthisbesufficienttoavoiddisputeswithfranchisees?Towhatextent?Whatare the best contractual solutions to adopt? The members of the panel will consider theeffectivenessofspecificcontractualclausesintheirownjurisdiction.
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CHAIR:MariaelenaGiorcelli,BuffaBortolotti&Mathis,TurinJenifer Alfaro, AlphabetoUruguay,Montevideo; IDI franchising country expert forUruguayFaisalDaudpota,DaudpotaInternational,KarachiandDubai;IDIfranchisingcountryexpertforPakistanPornchaiWisuttisak,Facultyof law,ChiangMaiUniversity; IDI franchisingcountryexpertforThailand
10:40-11:00 Coffeebreak
11:00-11:30 “TheFranchiseRebrandingArbitrationoftheCentury”(Whatarethemainissueswhenimplementingtherebranding?)How to properly communicate the decision to the franchisees and even involve them. Thedifficultiesandachievementsofcourseareseen inanoppositeway, intermsofeffortsandinvestmentstobemadeinorderforthedecisiontobeeffective,timingetc.,alsoconsideringthespecificlocationsofthefranchisees.Thegoodwilllinkedtothebrandsisalsoamainissueevaluated in the opposite sense from each side. The speakers will make the caseforrespectivelythefranchisorandthefranchisee, inanarbitralhearingattheendofwhichtheaudiencewilldecidethewinner.
CHAIR: Pascal Hollander, Hanotiau and van den Berg, Brussels; IDI franchisingcountryexpertforBelgiumJohnPratt,HamiltonPratt,Warwick;IDIfranchisingcountryexpertforUK(franchisor’sperspective)RonaldKGardner,Dady&Gardner,Minneapolis(franchisee’sperspective)
11:30-11:50 FinancingofrebrandingcostsOneofthecriticalissuesraisedbythedecisiontorebrandconcernstherebrandingcostsandfinancing. Both the franchisor and franchisee are likely to incur significant costs. Financingquestionsincludewhoisresponsibleforthecosts,ifmarketingfundscanbeapplied,andhowfinancingcanbestructuredtomotivatefranchiseestoembracetherebranding.
BeataKrakus,Greensfelder,Hemker&Gale,Chicago
11:50-12:15 PANEL:Changeinthebusinessmodelandtheknow-howInsomecases,thefranchisorneedstochangepartofthefranchisemodelortheknow-how,finding strong obstacles from the franchisees. Can a franchisor one-sidedly change thebusinessmodelandknow-how,evenwhencontractuallysuchsituationisnotforeseen?Canthe franchisorbase such claimon “unforeseen circumstances” and force the franchisees tocooperate with such change? Can the franchisor be forced tomaintain the “old” businessformulaunderpressureofthefranchisees?Whatifthemajorityofthefranchiseesagreewiththenewbusinessmodelbutaminoritystronglyobjects?
CHAIR: Tessa De Mönnink, De Grave De Mönnink Spliet Advocaten B.V.,Amsterdam;IDIfranchisingcountryexpertforTheNetherlandsAnders Thylin, Lindskog Malmström Advokatbyrå KB; Stockholm; IDI franchisingcountryexpertforSwedenOsvaldoMarzorati,Allende&Brea,BuenosAires;IDIcountryexpertforArgentinaSaurabhMisra,SaurabhMisra&Associates,Mumbai;IDIfranchisingcountryexpertforIndia
12:15-12:30 Discussion
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ConferenceSocialProgram
Thursday8June2017-Welcomecocktail 6:00pmAwelcomecocktailforalltheattendantswillbekindlyofferedbyRedlinkLawFirmandReedSmithLawFirm.Venue:RedlinkLawfirm Venue:ReedSmithLawFirm37-39,rueBoissière, 42,avenueRaymondPoincaré75116Paris 75782ParisWe kindly ask you to confirm your participation by selecting the relevant box in theregistrationform.
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Thursday8June2017-Speakers/Expertsdinner 8:30pmIDI invites all the speakers and the IDI country experts to an informal dinner, after thewelcomecocktail.Venue:WaknineRestaurant9AvenuePierre1erdeSerbie,75116ParisIfyouareeitheran IDI country expertor a speakerof the conferenceplease,confirmyourparticipationbyselectingtherelevantboxintheregistrationform.Wewillsendyouaspecialtickettobeshownattheentranceoftherestaurant.
Thefeeincludescoffeebreak,lunchanddocumentation.GaladinnerVenue:CercleNationaldesArmées,SalonHonneur.150€ per person. Please, remember that places are limited and shall be reserved at your earliestconvenience.Please,add22%(VAT)toyourpayment(applicableonlyforItalianparticipants)
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