A distribution system, in which a company grants exclusive rights on its products or services to another company. The most common forms include single branding and/or exclusive territory rights, whereby a single distributor obtains the right to market a supplier’s product in a specific territory. The supplier’s purpose in granting exclusivity is normally to provide the distributor with incentives to promote the product and provide better service to customers. In most cases, the distributor’s market power is limited by inter-brand competition.
Source: Glossary of terms used in EU competition policy, Antitrust and control of concentrations, European Commission, 2002