Free UK Exclusive Distribution Agreement Template

EXCLUSIVE DISTRIBUTION AGREEMENT

England And Wales  ·  VABEO 2022 + VBER 2022/720 Compliant  ·  2026-06-04

This Distribution Agreement (this "Agreement") is made on 2026-06-04 between Vermillion Coffee Roasters Ltd (Companies House No. 08831297) of 12 Olde Mill Lane, Bristol, BS1 5PL (the "Supplier"), and Iberia Café Partners SL (Companies House No. B-87234518) of Calle Caballero 28, Floor 3, 28015 Madrid, Spain (the "Distributor"). Under this Agreement, the Supplier appoints the Distributor on exclusive terms to purchase and resell the Products in the Territory. The Agreement is governed by the law of England and Wales and is structured to fall within the safe harbour of the Competition Act 1998 (Vertical Agreements Block Exemption) Order 2022 (SI 2022/516) (the "VABEO 2022") and, where the Distributor exports into the European Union, Commission Regulation (EU) 2022/720 (the "EU VBER 2022/720").

In this Agreement, unless the context otherwise requires:

"Active Sales" has the meaning given in article 1(1)(l) of the EU VBER 2022/720 and the equivalent article 1 definition in the VABEO 2022 — namely actively targeting customers by visits, direct mail, advertising specifically targeted at that customer group or territory, or online advertising targeted at customers in another exclusive territory or customer group.
"Business Day" means any day other than a Saturday, Sunday or public holiday in England and Wales.
"Customers" means the customers in the Customer Group within the Territory to whom the Distributor is authorised to sell the Products.
"Customer Group" means Specialty independent cafés, coffee shops, restaurants (HoReCa) and select boutique grocers with a minimum annual purchase commitment of €5,000. Excluded: large supermarket chains (Mercadona, Carrefour, El Corte Inglés, Continente) where the Supplier reserves direct supply..
"Hardcore Restriction" means any restriction listed in article 8 of the VABEO 2022 or article 4 of the EU VBER 2022/720 — including resale price maintenance (RPM), restrictions on the territory or customer group into which the Distributor may sell (subject to the four exclusive/selective distribution exceptions), and restrictions on the use of the Internet to sell.
"Passive Sales" means sales made in response to unsolicited requests from individual customers, including delivery of Products to the customer, without the sale having been initiated by actively targeting that particular customer, customer group or territory.
"Products" means the products described in Clause 2 and listed in Schedule 1.
"Purchase Order" means a written purchase order issued by the Distributor for Products.
"Reserved Customers" means the specific customers retained by the Supplier (if any), as set out in Clause 3.
"Territory" means Spain (excluding the Canary Islands) and Portugal (mainland Portugal — excluding Azores and Madeira).
"VABEO 2022" means the Competition Act 1998 (Vertical Agreements Block Exemption) Order 2022 (SI 2022/516), in force 1 June 2022 and valid to 1 June 2028.
"VBER 2022/720" means Commission Regulation (EU) 2022/720 of 10 May 2022, in force 1 June 2022 and valid to 31 May 2034.

References to statutes and regulations are to those instruments as amended, extended, re-enacted or replaced from time to time. Headings are for convenience only.

2.1 Products. The Products are: Vermillion-branded specialty single-origin coffee beans (whole bean and ground; 250g and 1kg packs), packaged tea selection and pre-brewed cold brew bottles. Approximately 22 SKUs across the range. Premium speciality grade, single-origin sourced.
(See Schedule 1 for the full list of Products.)

2.2 Territory. The Territory is: Spain (excluding the Canary Islands) and Portugal (mainland Portugal — excluding Azores and Madeira)

2.3 Customer Group. The Customer Group is: Specialty independent cafés, coffee shops, restaurants (HoReCa) and select boutique grocers with a minimum annual purchase commitment of €5,000. Excluded: large supermarket chains (Mercadona, Carrefour, El Corte Inglés, Continente) where the Supplier reserves direct supply.

2.4 Modifications. The Supplier may, on not less than ninety (90) days' written notice, add, withdraw or modify the Products. Where a withdrawal materially adversely affects the Distributor's business, the parties shall negotiate in good faith an equitable adjustment to the minimum purchase obligations.

3.1 Exclusivity grant. The Supplier hereby grants the Distributor the EXCLUSIVE right to distribute and sell the Products in the Territory. During the Term, the Supplier shall not, directly or indirectly: (a) appoint any other distributor for the Products in the Territory; (b) actively or passively sell the Products itself to any customer in the Territory; or (c) authorise any third party to do so. This exclusivity is the consideration for the Distributor's investment in the Territory, marketing of the Products, and acceptance of the minimum purchase obligations.

3.2 Supplier's direct sales. The Supplier may sell the Products directly to the Reserved Customers identified below, and may not sell to any other customer in the Territory:
El Corte Inglés (Spain) — premium gourmet department; Supplier retains direct supply
Continente Bom Dia (Portugal) — premium grocery format; Supplier retains direct supply
Iberia Airlines on-board service contract — Supplier retains direct supply

3.3 Distributor's independence. The Distributor is and shall remain an independent contractor and shall purchase and resell the Products on its own account, not as agent for the Supplier. Nothing in this Agreement creates an employment, agency, joint venture or partnership relationship. In particular, the parties confirm that the Distributor is NOT a commercial agent and that the Commercial Agents (Council Directive) Regulations 1993 (SI 1993/3053) do NOT apply.

3.4 Compliance with law. The Distributor shall sell the Products in compliance with all applicable laws of the Territory (including consumer protection, product safety, marketing and advertising standards, and any sector-specific regulations).

4.1 Purchase Orders. The Distributor shall place Purchase Orders for Products in accordance with the Supplier's order procedures. Each Purchase Order is subject to acceptance by the Supplier (such acceptance not to be unreasonably withheld).

4.2 Pricing. Prices shall be the Supplier's published list prices (as updated from time to time on not less than 30 days' notice) less an agreed discount.

4.3 Minimum Annual Purchase. The Distributor commits to a minimum annual purchase of €180,000. Failure to meet the minimum in any contract year shall entitle the Supplier to: (a) terminate this Agreement on 90 days' notice; or (b) convert the appointment to non-exclusive on 60 days' notice.

4.4 Currency. All prices are quoted in EUR and shall be invoiced in that currency.

4.5 Payment terms. The Distributor shall pay the Supplier's invoices within 45 days of the invoice date.

4.6 Late payment. Any undisputed amount not paid by the due date shall bear interest from the due date until actual payment at the Bank of England base rate plus 8% per annum, together with the fixed compensation and reasonable recovery costs under sections 5 and 5A of the Late Payment of Commercial Debts (Interest) Act 1998.

4.7 Title and risk. Title in the Products shall pass to the Distributor on full payment; risk shall pass on delivery to the Distributor or its nominated carrier. Where Products are supplied subject to a retention of title clause in the Supplier's standard terms, those terms shall apply (subject to any inconsistency with this Agreement, in which case this Agreement prevails).

5.1 Licence grant. The Supplier hereby grants the Distributor a non-exclusive, royalty-free, non-transferable, non-sub-licensable licence to use the Supplier's registered trade marks (as listed below) solely for the purposes of marketing, distributing and selling the Products in the Territory, and only on the terms of this Agreement and any associated brand standards manual.

5.2 Registered trade marks. The licensed trade marks are:
UK Registered Trade Mark UK00003487291 ("Vermillion Coffee Roasters" — class 30)
EU Registered Trade Mark EM018298471 ("Vermillion Coffee" — class 30)
UK Registered Trade Mark UK00003671829 ("Single Origin Series" — class 30)
Unregistered Vermillion logo (used continuously since 2017)

5.3 Quality control. The Supplier (or its nominee) shall have the right, on reasonable notice and during the Distributor's ordinary business hours, to inspect samples of the Products and the manner in which the trade marks are used, to ensure compliance with the Supplier's brand standards (Trade Marks Act 1994 s.10(3) quality-control duty). The Distributor shall not modify, deface, obscure or alter the trade marks.

5.4 Brand standards. Distributor shall comply with the Vermillion Brand Book (May 2026 edition) — covering logo usage, colour palette (Vermillion Red #B43E2F), packaging presentation, point-of-sale materials, and Distributor-branded marketing collateral approval (24-hour approval turnaround). Online listing presentation shall include all approved product imagery, product descriptions translated by approved translators.

5.5 No other IP. Save as expressly granted in this Clause 5, no licence of any other intellectual property is granted under this Agreement.

5.6 Notification of infringement. The Distributor shall promptly notify the Supplier of any actual or threatened infringement of the trade marks of which it becomes aware. The Supplier shall have the sole right (but not the obligation) to take enforcement action; the Distributor shall provide reasonable assistance at the Supplier's cost.

6.1 Quality. The Supplier warrants that the Products will, on delivery to the Distributor, conform with the agreed specifications, be of satisfactory quality and reasonably fit for the purposes for which products of the kind are commonly supplied (these warranties are in addition to, and not in derogation of, the implied terms under the Sale of Goods Act 1979).

6.2 Defect remedy. Where Products are defective, the Distributor may notify the Supplier within sixty (60) days of delivery (visible defects) or within ninety (90) days of discovery (latent defects). The Supplier shall, at its option, repair, replace or refund the price of defective Products. This remedy is the Distributor's exclusive remedy for product defects.

6.3 No further warranties. Save as expressly stated, all other warranties (express, implied, statutory or otherwise) are excluded to the maximum extent permitted by law (UCTA 1977 s.3 reasonableness test acknowledged — sophisticated B2B parties).

6.4 Consumer Rights flow-down. Where the Distributor resells to consumers (B2C), the Distributor shall comply with its own duties under the Consumer Rights Act 2015 and shall not pass through to the Supplier any liability that arises from the Distributor's own resale conduct or pricing.

7.1 Distributor's general right to sell. The Distributor may make passive sales (responding to unsolicited customer requests, including from outside the Territory) WITHOUT restriction. This is fundamental: any restriction on the Distributor's passive sales is a Hardcore Restriction that would remove the block exemption (VABEO 2022 article 8(b); VBER 2022/720 article 4(b)).

7.2 Active sales restriction — Territory. The Distributor shall not actively pursue sales of the Products into a territory or customer group exclusively allocated by the Supplier to itself or to another distributor (VABEO 2022 article 8 fourth exception / VBER 2022/720 article 4(b)(i)). The Distributor shall not: (a) advertise specifically targeted at customers outside the Territory; (b) translate websites into languages other than those commonly used in the Territory for the purpose of active selling; (c) operate physical premises outside the Territory; (d) send unsolicited correspondence to customers outside the Territory.

7.3 Distributor's downstream restrictions on its customers. The Distributor shall ensure that its customers within the selective distribution network (where applicable) and its downstream resellers do NOT actively sell to customer groups or territories outside their authorised scope (VABEO 2022 article 8 / VBER 2022/720 article 4(b)(ii)).

7.4 Cross-supply within selective network. Not applicable — this is not a selective distribution network.

7.5 Customers' freedom to resell. The Distributor shall not impose on its customers any restriction on their right to resell the Products freely (except where the customer is itself a member of a selective distribution network or is restricted on active selling in the same way as the Distributor).

8.1 Online sales. The Distributor may sell the Products via the Internet and any electronic platform without restriction. The operation of a website to sell the Products is a form of passive selling and shall not be restricted. The Supplier shall not require dual pricing (different wholesale prices for online vs offline sales) save where objectively justified by significant cost differences (VBER 2022/720 article 4(e); Guidelines paragraphs 209-216).

8.2 Resale Price Maintenance (RPM). The parties acknowledge that the Supplier shall NOT directly or indirectly impose fixed or minimum resale prices on the Distributor. The Distributor is entirely free to determine its resale prices. Maximum resale prices and (non-binding) recommended resale prices are not RPM — but only where they do not amount, in practice, to a fixed or minimum price. RPM is a Hardcore Restriction (VABEO 2022 article 8(a); VBER 2022/720 article 4(a)).

8.3 Minimum Advertised Price (MAP). The Supplier may from time to time publish recommended retail prices for the Products. These are NON-BINDING and the Distributor remains entirely free to set its own pricing.

9.1 Market share warranty. Each party warrants and represents to the other that, as at the date of this Agreement, its market share on the relevant product market is below 30%. This is the threshold for the VABEO 2022 / VBER 2022/720 block exemption safe harbour.

9.2 Hardcore restriction audit. The parties have reviewed the restrictions in this Agreement against the Hardcore Restrictions listed in article 8 of VABEO 2022 and article 4 of VBER 2022/720, and confirm that none of those restrictions is intended to be imposed. The parties commit to amending the Agreement if any hardcore restriction is identified.

9.3 Spare parts to independent repairers. Where the Distributor is a manufacturer of the Products, the Distributor shall not restrict the supply of spare parts to independent repairers (VABEO 2022 article 8 / VBER 2022/720 article 4(f)). Restriction of spare-part sale to independent repairers is a Hardcore Restriction.

9.4 Withdrawal of block exemption. Each party acknowledges that the CMA may, in cases of network effects, withdraw the benefit of the VABEO 2022 from this Agreement (VABEO 2022 article 10). The parties shall cooperate in good faith with any CMA review and shall amend the Agreement as required.

10.1 Termination triggers. Either party may terminate this Agreement: (a) on the expiry of the Initial Term in accordance with Clause 11.1; (b) immediately on written notice if the other party commits a material breach incapable of cure or fails to cure within 30 days of written notice; (c) immediately on written notice if the other party becomes insolvent or has a receiver, administrator or liquidator appointed.

10.2 Stock buy-back. On termination (otherwise than for the Distributor's material breach), the Supplier shall buy back at the Distributor's cost plus 10% (commercial compromise for handling and re-stocking) all conforming Products held in the Distributor's stock that conform with the then-current Specification and are not damaged or obsolete. The Distributor shall provide a stock report within 10 Business Days of termination and the Supplier shall pay within 30 days of stock receipt.

10.3 Trade mark reversion. On termination, the trade mark licence under Clause 5 ceases immediately. The Distributor shall cease all use of the licensed trade marks (subject to a reasonable run-off period of up to 90 days to clear the Distributor's remaining stock) and shall remove the trade marks from its premises, marketing materials, websites, social media and online listings.

10.4 Goodwill compensation. Where the Supplier terminates this Agreement otherwise than for the Distributor's material breach, the Supplier shall pay the Distributor a goodwill compensation equal to one (1) year's average net profit (calculated by reference to the three years preceding termination, or the term to date if shorter). For the avoidance of doubt, this compensation does NOT arise from the Commercial Agents (Council Directive) Regulations 1993 (which do not apply to this distribution relationship) but is a freely-negotiated contractual entitlement.

10.5 Surviving obligations. Confidentiality, IP, trade mark reversion, audit rights and any indemnities accrued before termination shall survive termination indefinitely.

11.1 Modern Slavery. Each party shall comply with the Modern Slavery Act 2015. The Distributor warrants that, to the best of its knowledge, no slavery, servitude, forced or compulsory labour or human trafficking is involved in its supply chain or in the resale of the Products. Where required by section 54, each party shall publish an annual modern-slavery statement.

11.2 Bribery. Each party shall comply with the Bribery Act 2010, in particular sections 1, 2, 6 and 7, and warrants that it maintains adequate prevention procedures within section 7(2) of that Act. Neither party shall offer or accept any improper inducement.

11.3 Failure to Prevent Fraud (ECCTA 2023 s.199). The Distributor acknowledges that, from 1 September 2025, large organisations are criminally liable under section 199 of the Economic Crime and Corporate Transparency Act 2023 for failure to prevent fraud committed for the organisation's benefit by associated persons (which can include distributors). The Distributor shall maintain reasonable prevention procedures and shall not commit any fraud offence for the Supplier's benefit.

11.4 Sanctions. Each party shall comply with the Sanctions and Anti-Money Laundering Act 2018 and all UK, EU, US and UN sanctions regimes. The Distributor shall not sell the Products to any person on a sanctions list, and shall implement appropriate sanctions screening of Customers.

11.5 Data protection. Where the Distributor processes personal data of Customers in connection with the resale of the Products, the Distributor shall comply with UK GDPR + Data Protection Act 2018 (as amended by the Data (Use and Access) Act 2024, in force 5 February 2026). Where the Supplier and Distributor are independent controllers of the same data, they shall implement a controller-to-controller data sharing arrangement consistent with the ICO Data Sharing Code of Practice.

12.1 Term. This Agreement commences on the date above and shall continue for an initial term of 3 year(s), and shall thereafter automatically renew for successive 12-month periods unless terminated by either party giving not less than 6 months' written notice of non-renewal (such notice to expire on the end of the initial term or any renewal term).

12.2 Termination for cause. Either party may terminate this Agreement immediately on written notice if the other: (a) commits a material breach incapable of cure, or fails to cure a curable material breach within 30 days of written notice; (b) becomes insolvent, has a receiver, administrator or liquidator appointed, or enters into any arrangement with creditors; or (c) ceases or threatens to cease trading. Termination consequences (stock buy-back, trade mark reversion, goodwill compensation) are dealt with in Clause 10.

12.3 Effect of termination. On termination: (a) the Distributor's rights to distribute the Products and use the trade marks cease (subject to any run-off period); (b) accrued payment obligations remain due; (c) the Supplier shall fulfil any accepted Purchase Order; (d) confidential information shall be returned or destroyed.

13.1 Excluded losses. Neither party shall be liable for any loss of profits, loss of revenue, loss of goodwill, loss of opportunity, loss of anticipated savings, pure economic loss or any indirect or consequential losses, whether or not the possibility of such loss was contemplated.

13.2 Aggregate cap. Subject to Clause 13.3, the aggregate liability of either party under this Agreement, whether in contract, tort (including negligence), breach of statutory duty or otherwise, in any rolling 12-month period shall not exceed the greater of (a) the aggregate amounts paid (or payable) by the Distributor to the Supplier under this Agreement in that period, and (b) £500,000.

13.3 No exclusion. Nothing in this Agreement excludes or limits liability for: (a) fraud or fraudulent misrepresentation; (b) death or personal injury caused by negligence; (c) liability under Part I of the Consumer Protection Act 1987 for defective products; (d) the Distributor's obligation to pay undisputed amounts; or (e) any liability that cannot lawfully be excluded.

13.4 Reasonableness. The parties acknowledge (as sophisticated commercial businesses contracting at arm's length) that the limitations in this Clause are reasonable for the purposes of section 3 of the Unfair Contract Terms Act 1977.

14.1 Governing law. This Agreement and any dispute or claim arising out of or in connection with it shall be governed by the law of England and Wales. The parties irrevocably submit to the exclusive jurisdiction of the courts of England and Wales.

14.2 Entire agreement. This Agreement (together with any Schedule and Purchase Order) constitutes the entire agreement between the parties and supersedes all prior drafts, proposals and understandings. No variation shall be effective unless in writing and signed by or on behalf of each party.

14.3 Third-party rights. A person who is not a party to this Agreement has no rights under the Contracts (Rights of Third Parties) Act 1999, save that any member of the Supplier's Group may enforce the Distributor's warranties and indemnities in its own right.

14.4 Counterparts and execution. This Agreement may be executed in counterparts and by electronic signature in accordance with section 7 of the Electronic Communications Act 2000.

14.5 Notices. Notices shall be in writing, delivered by hand, first-class pre-paid post or email to the addresses set out above. Notices delivered by hand are deemed received on delivery; by first-class post on the second Business Day after posting; by email on the next Business Day after transmission (subject to no bounce-back).

14.6 Severability. If any provision is held invalid or unenforceable, the provision shall be modified to the minimum extent necessary to render it enforceable, and the remainder shall continue in full force.

14.7 No assignment. The Distributor shall not assign or transfer this Agreement or any rights or obligations under it without the Supplier's prior written consent. The Supplier may assign on written notice to any member of the Supplier's Group or any acquirer of substantially all of the Supplier's business.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date indicated.