Ministry of Commerce to (Mal): Exclusivity in the sale of goods is a contractual matter between the agent and the principal, and the current framework does not require exclusivity nor prevent it.

The Ministry of Commerce confirmed to (MAL) its endeavor to preserve the integrity of the market and the interests of consumers, noting that exclusivity in the sale of goods is a contractual matter between the agent and the principal and they are free to agree on what they deem to be in the commercial interest, and that the current framework does not obligate exclusivity nor prevent it, at the time it described There are consumers who believe that the exclusivity of selling some international products in the local market and preventing their shipment from foreign stores has become a monopoly, accompanied by exaggeration of prices by agents in the Kingdom.

The Ministry of Commerce explained in response to Mal’s inquiry that the agent acts in the place of the principal in his country to carry out commercial business, based on commercial considerations for the agent and the principal, and each case is studied individually to ensure that the practice does not violate the Ministry of Commerce’s regulations.

She added that freedom of contract is considered one of the basic pillars in this, and is consistent with international best practices, with strict procedures and controls regarding goods and services provided to the consumer, noting that the General Administration of Commercial Control is responsible for supervising and monitoring markets, sales outlets, and agencies to verify their compliance with the Ministry of Commerce’s regulations. Preserving consumer rights, and the provisions for providing maintenance and providing spare parts require the agent to provide, on a permanent basis and at reasonable prices, the spare parts that consumers usually request on an ongoing basis.

For his part, lawyer Abdullah Al Mansour – a core member of the Saudi Bar Association and interested in commercial issues – indicated that the contracts governing the use of trademarks (international brands) are either a franchise contract or a commercial agency contract, indicating that the Saudi legislator organized the franchise contract in a system Franchising and defined the nature of the franchise contract and defined it as when a person called the franchisor grants the right to another person, allowing the franchisee to carry out the business (franchise shop) in connection with the trade name or trademark that the franchisor owns or is licensed to use. The franchise contract gives all the rights that It is for the franchisor. As for the commercial agency contract, it may be defined as selling products or providing services to the consumer in exchange for money, where the commercial agent acts as a representative of the parent company that owns the trademark, and thus the agent is only a representative of the parent company and follows it.

Lawyer Al Mansour said that there are two clauses in both contracts, including: the concession area and the geographical area: the concession contracts and commercial agency contracts stipulate this condition and it is considered an essential condition in the agency or concession contract, so that the geographical area contracted for is specific to the concessionaire or the agent, so it is not permissible The client or franchisor may practice his commercial, service, logistical, or other activities in the agreed upon geographical area. The second clause includes a non-competition condition: It is considered one of the essential conditions in both franchise contracts and commercial agency contracts, and breaching it results in the absence of the purpose of the franchise contract. Or the commercial agency contract, the content of which is that the principal or franchisor may not compete with the franchisor or agent in the region or area in which he practices activities related to the agency or franchise contract, whether by himself, or by granting him the right to franchise or concluding an agency contract with other people.

He added that when a consumer requests a product or service from the parent company, whether via the information network or other means of communication, and is transferred to the agent’s or franchisee’s website or to any of the communication channels, this is in accordance with the commercial agency contract or the franchise contract and a commitment to the terms and conditions of the contract, indicating At the same time, the importance of these contracts in raising the level of the national economy, reducing unemployment rates, improving international trade relations, in addition to improving the economic and commercial situation and keeping pace with business and developing it to achieve profit.

Ahmed Al-Harbi stated that he had previously ordered from one of the international store sites instead of the local store due to the lower prices of goods in international stores with a difference of more than 200 riyals from their price at the agent, but 5 months ago the site began refusing to ship abroad, indicating that When inquiring about the reason for the non-shipping problem, he was informed by the customer service at the foreign store that the reason was due to export rules.

Shahad Muhammad also stated that she had made several attempts to order medical uniforms from international stores, in addition to bags and cosmetics, but her orders were refused to be shipped and they were forced to be referred to agent sites. She added that this is considered a monopoly, accompanied by – according to her description – exaggeration of prices by agents compared to prices. External stores.