Vertical Agreements In The Luxury Sector

The characteristics of luxury products distinguish this market from that of mass-goods. Luxury goods are ‘high-quality articles with a relatively high price, marketed under a prestige trademark’.1 As further remarked in Coty, ‘the quality of [luxury] goods is not just the result of their material characteristics, but also of the allure and prestigious image which bestow on them an aura of luxury, that that aura is essential in that it enables consumers to distinguish them from similar goods and, therefore, that an impairment to that aura of luxury is likely to affect the actual quality of those goods’.2 A large number of manufacturers and suppliers choose to protect their brands and preserve the high-quality image and reputation of their products through the use of selective distribution systems. Such systems reduce the number of distributors/resellers authorized to sell products in selective distribution by applying qualitative...