Distribution Practices and Strategies
Buyers and sellers of goods are continuously looking beyond the boundaries of their current business environment—literally and figuratively—to meet the multiple challenges of emerging market forces, technological advances, significant changes in interpretation of distribution law, and ever-increasing customer demands for better service and greater value. The changing marketplace has led to a wave of mergers, acquisitions and consolidations has created a number of retailing and distribution giants. At the same time, e-commerce continues to revolutionize customer service, internal management and delivery systems for all participants in the supply chain. Additionally, globalization has raised a host of new opportunities—and challenges. As new channels proliferate, competition in and among them intensifies. Our Distribution Practices and Strategies Group understands the broad impact of these developments on various industries in national and world markets. We compliment this knowledge with our understanding of the basic commercial and operational issues that affect manufacturers, suppliers and distributors on a day-to-day basis.
Our Firm's Distribution Practices and Strategies Group focuses on the representation of manufacturers, suppliers, dealers and companies at all levels of the distribution chain with respect to their commercial, transactional and regulatory needs. Our Group is comprised of an experienced team of over sixty lawyers across our U.S. and European offices. We are also fully integrated with the Firm's Trial, Regulation and Government Affairs, and Intellectual Property Departments. These integrated groups total more than 400 lawyers with recognized experience in all areas of antitrust, trade regulation, distribution, corporate, intellectual property and litigation matters. Collectively, we are well-positioned to provide comprehensive legal services to our clients in connection with the development and execution of their distribution strategies on a global basis.
Our clients comprise a diverse group of manufacturers, service providers, wholesalers, suppliers, importers, franchisors, distributors and retailers. Many of these entities are leaders in the hotel, fast food, alcohol and non-alcohol beverage, computer, automobile, petroleum, medical devices and equipment, aerospace, industrial equipment, publishing and other industries.
STRATEGIC DISTRIBUTION COUNSELING
Companies are constantly looking to improve efficiency and reduce costs. These competitive edge strategies often mean a need to modify or terminate existing distribution agreements. In attempting to implement these desired changes, however, companies are invariably confronted with a complex maze of domestic and international dealer protection statutes and inevitable threats of antitrust and other federal and statutory claims as well as common law, contract and business tort claims.
Drawing upon our broad experience base and our extensive geographic coverage, our Distribution Practices and Strategies Group is well-positioned to assist clients in designing and implementing their strategies in a manner which minimizes these legal and regulatory risks. For example, we developed and implemented a system-wide distribution change enabling a client to modify its four-tier distribution system to a two-tier direct manufacturer-to-dealer system. This strategy, which involved orchestrating the termination of approximately 100 distributors throughout 48 U.S. states, was designed and implemented successfully, resulting in a more efficient direct distribution system without a single lawsuit being instituted in any of the relevant jurisdictions.
MERGERS & ACQUISITIONS
Parties to a proposed merger often expect to achieve distributional efficiencies by aggregating and modifying the combined companies' distribution systems. Given the complex array of statutes and regulations affecting supplier distribution relationships, anticipated efficiencies can only be achieved after an analysis has been performed to assess whether the acquired company's distribution arrangements can in fact be terminated or otherwise modified, and, if so, at what cost and on what timetable.
Our Distribution Practices and Strategies Group assists our clients in evaluating a prospective merger candidate's distribution system and analyzing the risks and strategies available to the acquiring company to achieve the efficiencies expected from a proposed acquisition. Group members evaluate and draft new or modify existing distribution agreements for U.S. or international use, and have prepared numerous distribution agreements designed to protect client's interests in various industries. Taking advantage of our broad geographic presence, we can assist clients in implementing a single distributorship change or coordinate a regional, national or international modification or consolidation effort in a manner that will eliminate or minimize costs and delays.
DEALER TERMINATIONS
McDermott lawyers often advise clients regarding the most cost effective methods of accomplishing a single or multiple distributorship termination effort. Our extensive experience litigating disputed terminations allows us to evaluate the potential legal exposure associated with dealer terminations and to develop strategies designed to minimize these risks.
In the event of a termination we can often negotiate agreements that produce a quick and smooth transition to new distributors, ensuring an uninterrupted flow of services or products to the marketplace. Group members have represented the full array of suppliers (and in some instances, distributors) in connection with termination strategies, counseling and litigation matters.
LITIGATION
In some instances litigation is inevitable. Our Distribution Practices and Strategies Group has extensive experience representing clients in all aspects of litigation, including injunctions, trials and appeals at the state and federal court levels, as well as before industry regulatory agencies in the U.S. and the EU. We have, for example, represented a large beverage supplier in multi-party litigation brought by its terminated distributors, and have successfully defended a supplier against a distributor's damages claim of $200 million arising out of its assertion that its exclusive distribution rights in Canada were wrongfully terminated.
ALCOHOL BEVERAGE
McDermott Will & Emery represents many U.S., European and multinational breweries, distilleries, wineries, and alcohol beverage importers of all sizes. Our work for these clients includes regulatory, antitrust, product liability, corporate and trademark counseling, as well as pre-litigation and litigation services.
The distribution of beverage alcohol in the United States is heavily regulated, and demands an intimate knowledge of regulatory and legal concepts (tied house legislation, the three-tier system, specialized beer and liquor franchise laws) unique to the industry. Working closely with our alcohol beverage regulatory lawyers, our Distribution Practices and Strategies Group provides advice and litigation services to many beverage alcohol companies. We have helped establish and implement distribution systems for many clients. This requires developing systems designed to comply with federal and state law; obtaining licenses, label approvals and other permits necessary to distribute alcohol beverages; and preparing and negotiating contracts that accommodate the demands of state franchise laws. When disputes arise, McDermott Will & Emery offers unparalleled experience in distributor relations, terminations and, if necessary, litigation.
Contacts
- Lawrence I. Fox
+1 212 547 5403
Send E-mail - Raymond A. Jacobsen Jr.
+1 202 756 8028
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