Manufacturers can limit
distributors' activities
Manufacturers may be in a posi- would c reate antitru st problems for territorial sales and sales to certain
selected customers could be pro-
tion to dictate which areas their dis- them .
tributors can sell in and which
But, according to the report, the hibited , and a wholesaler-distribu-
competing products they cannot Department of Jusitce is relaxing tor violating such an arrangement
represent , according to a legal those standards so that distributors could be subject to termination of
report outlining recent guidelines would find it " increasingly diffi- the business relationship with the
from the Department of Justice to cult ... to win antitrust suits against manufacturer. "
the federal courts concerning anti- manufacturers. "
During the video game boom,
In the specific area of territorial manufacturers repeatedly contended
trust litigation.
According to a report issued restrictions, the report said , " extra- they could not stop their distribu-
recently by the Chicago law firm of
Halfpenny, Hahn & Roche (which - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
represents the National Association
of Wholesaler-Distributors) and
reprinted in AMOA's distributor
newsletter, The AMOA Distributor
News-the Department of Justice is
allowing manufacturers wider lati-
Custom Events International , Kirk McKennon , former sales and
tudes with regard to their business
promotion s manager for Hanson
Bloomington , Minnesota , formed
relationships with distributors.
And those wider latitudes allow exclusively for the promotion of Distributing Company.
McKennon was in charge of all
manufacturers to place wider coin-operated games, is headed by
foosball , pinball , pool, and elec-
restraints on their distributors
tronic dart events during the past 11
" including exclusive dealer con-
years for Hanson .
tracts and rigid territorial customer
" There are no secrets surround-
restrictions."
ing coin-op promotion s," says
According to the report, the
McKennon , " but there are right and
Department of Justice is allowing
manufacturers to fashion " a more
wrong wa ys to run leagues and tour-
rigidly controlled distributional
naments. Our objective is to pro-
process" because "tighter manufac-
mote operators ' games on the street,
turer controls will produce greater
so results show up in the cash box."
efficiencies."
Custom is currently working
During the video game boom,
with Idea of Sycamore, Illinois, pro-
distributors of amusement equip-
moting its All-Ame rican and Century
ment started selling outside their
Darts lines and has signed w ith
territories, and man y claimed that
Han son Distributing Compan y to
helped create the chaotic market
run its October 1982, $15,000 Dart
conditions which led to the subse-
Shootout in St. Paul , Minnesota .
quent video game bust. But, during
McKennon can be reached at
that time, manufacturers said they
800/ 328-2866 or by contacting Idea
Kirk M c Kenn o n
could not enforce territorial restric -
at 815/ 895-8188.
•
~ons on their distributors because it
McKennon forms coin-op
promotion company
10
PlAY METER. July 15, 1985