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Mizuno Corporation - Distribution Policy

Effective : 1st June 2016

Product Segmentation Policy

1. Mizuno reserves the right to deliver certain product (in particular but without limitation those with new innovative technology features) to certain types of customers only by segmenting the line of products on the basis of reasonable commercial and entrepreneurial considerations. This may also apply in the event of launches of new models introduced to the European market.

2. These Specific Terms shall become effective from 1st June, 2016 onward and shall amend Mizuno’s respective general terms of sale and delivery in force in the territory the respective European retail customer of Mizuno (hereinafter “the Retail Customer”) is performing its business activities (hereinafter “the General Terms”).

3. The acceptance of products by the Retail Customer supplied by Mizuno after these Specific Terms came into force, shall be also deemed as acceptance of these Specific Terms by the Retail Customer.

4. Mizuno reserves the right to change and/or to amend the Specific Terms in the future or to entirely replace them by a newer version (hereinafter “the Modification”) at Mizuno’s discretion, but undertakes to inform the Retail Customer upon such Modification prior to its effectiveness.

Legal Justification

1. Relevant Legal Framework and Regulations, Governing Legal Pricipiles:
a. Articles 101 – 105 on the Treaty of the Functioning of the European Union (TFEU) which deals with abuses of market dominant positions of commercial undertakings
b.Mizuno’s European product segmentation policy towards its retail customers falls within the category of vertical relationships, since within the supply chain we as a manufacturer and supplier of sporting goods are acting at a ?higher level than a retailer, it is a downstream relationship for us.
c.These vertical dealings and commercial operations are viewed and examined on the basis of the above-quoted articles of the TFEU in the light of the Group Exemption Regulation Vertical (EU) of April 20, 2010 (VBER2010.

2.Market shares/Definition of the Relevant Market and its Relevance for Mizuno’s European Distribution Scheme:
a.It is of high importance to emphasize in this context that all these aforementioned European and national antitrust law provisions only apply for market dominating companies, unless vertical policies , practices and contractual arrangements constituted a severe violation of applicable antitrust laws (i.e. so-called ?hardcore infringements or black clauses‘ in contracts or other commercial dealings between a supplier and its retailers).
b.The freedom to contract principle, which is a European constitutonally guaranteed right as one facet of each commercial operator‘s entrepreneurial freedom to shape its business relations at its discretion applies for many smaller to medium-sized companies within the European Union. This implies that the brand owner is entitled to reject entering or to stop doing business with an actual customer without any need to provide a reason for this behavior. In this category there is no discrimination issue, which needs to be observed by choosing business partners, no obligation to supply somebody with certain products or to be kind of forced by mandatory laws to serve certain channel of retailers group.
i.Such freedom does however no more exist or is restrained by applicable cartel laws, if certain thresholds (=market shares) are exceeded. The basic principle is that a market share exceeding 30% in the so-defined product and geographic market would create a market dominating position.
c.As Mizuno does NOT hold a market share of +30% and is therefore not in a market dominate position, it is under the laws of the EU, allowed to operate a product segmentation policy.

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