Please contact Will Sparks, Gerard McElwee, and Oliver Geiss with any questions
Territorial Supply Constraints (TSCs) refer to a range of practices used by brands and manufacturers that limit where retailers, wholesalers and distributors source their products – for example, preventing them from buying products from outside the country where they operate.
EU competition law does not outright prohibit TSCs, as TSCs are necessary in some situations and indeed can lead to lower prices for consumers. However, the Commission has conducted several investigations into restrictions on cross-border trade, and has taken enforcement action in notable cases. The Commission adopted two decisions prohibiting TSCs in 2024, imposing fines in both cases, and the trend of increased enforcement is continuing; in March 2025, the Commission confirmed that it had conducted unannounced inspections (dawn raids) in the soft drink industry to investigate suspected restrictions on trade between EU member states. In addition to enforcement action, TSCs are increasingly subject to policy initiatives aimed at increasing free trade.
We anticipate that TSCs will remain in focus in the short-to medium-term. Any changes to how TSCs are addressed – including a possible blanket ban, as endorsed by some EU member states – would have a significant impact on operators at all levels of the supply chain from manufacturing to wholesale, distribution and retail, and across all industries (both goods and services).