Competition Law in Perfume Distribution Concentration in Morocco

1. Introduction

Perfume distribution concentration in Morocco raises important competition-law issues involving market dominance, exclusive distribution agreements, selective distribution networks, luxury-brand licensing, mergers and acquisitions, parallel imports, and restrictions on independent retailers.

The perfume industry has a distinctive market structure because international manufacturers frequently appoint exclusive importers, wholesalers and authorised retail distributors. When a small number of companies control access to internationally recognised perfume brands, distribution channels or retail networks, competition may be restricted.

Moroccan competition law seeks to ensure that commercial concentration does not eliminate effective competition, create artificial barriers to entry or enable undertakings to exploit their market power.

The principal legislation is:

Law No. 104-12 on Free Pricing and Competition.

Law No. 20-13 relating to the Competition Council.

Decree No. 2-14-652 implementing Law No. 104-12.

Relevant provisions of Moroccan intellectual property and commercial law.

An important distinction: A large perfume distributor is not automatically unlawful. Competition concerns arise when concentration, exclusionary conduct or restrictive agreements substantially impair competitive conditions.

2. Legal Framework Governing Perfume Distribution Concentration

A. Law No. 104-12: Free Pricing and Competition

Law No. 104-12 is the principal legislation governing restrictive commercial practices and economic concentrations in Morocco.

Its provisions are particularly relevant to perfume distribution.

Article 6 – Anti-competitive agreements

Article 6 prohibits agreements, concerted practices and arrangements that prevent, restrict or distort competition.

In perfume distribution, violations may include:

Agreements between perfume wholesalers to divide geographical territories.

Agreements preventing retailers from purchasing from alternative suppliers.

Collective exclusion of independent perfume retailers.

Agreements fixing wholesale or retail prices.

Coordination between competing distributors to restrict product availability.

Article 7 – Abuse of dominant position

Article 7 prohibits abuse of a dominant position and abuse of economic dependence.

Examples include:

Refusing to supply independent perfume retailers without objective justification.

Imposing discriminatory wholesale prices.

Conditioning access to popular perfume brands on purchasing unrelated products.

Restricting retailers from selling competing perfume brands.

Imposing minimum resale prices.

Discontinuing established commercial relationships because a retailer refuses unjustified conditions.

Article 8 – Predatory pricing

Article 8 addresses abusively low consumer prices intended or capable of eliminating competitors or preventing market entry.

For example, a dominant perfume distributor might temporarily sell luxury perfumes below relevant costs to eliminate smaller competing retailers.

Articles 6–8 therefore address different forms of anti-competitive behaviour in the perfume market.

WIPO Lex+1

B. Articles 11–18: Merger and Acquisition Control

Article 11 defines economic concentration.

Concentration may occur through:

Merger of previously independent undertakings.

Acquisition of direct or indirect control over another undertaking.

Acquisition of control through shares, assets or contractual arrangements.

Creation of a full-function joint venture.

This is particularly relevant when an international perfume manufacturer acquires a Moroccan importer or when a major distributor purchases competing retail businesses.

Article 12 establishes notification requirements.

The principal notification thresholds include:

The applicable statutory wording and thresholds must be checked against the current implementing provisions and amendments when preparing an actual filing.

WIPO Lex+1

Article 15: Provides for the initial examination of notified concentrations, including conditional authorisation and the possibility of an in-depth investigation.

Article 16: Requires assessment of whether a concentration creates or strengthens a dominant position or purchasing power capable of placing suppliers in economic dependence.

Article 17: Allows authorisation subject to commitments, additional requirements or prohibition.

Article 19: Provides for consequences of implementing a notifiable concentration without notification, including financial penalties.

WIPO Lex+1

3. Relevant Markets in Perfume Distribution

Market definition is essential to determine whether a concentration creates or strengthens market power.

A. Product market

The Moroccan perfume market may include several distinct product categories:

Luxury branded perfumes.

Premium designer fragrances.

Mass-market perfumes.

Niche and artisanal fragrances.

Unisex perfumes.

Online perfume distribution.

Wholesale perfume imports.

The Competition Council should examine whether consumers regard these categories as substitutes.

Luxury perfumes may constitute a separate relevant market where brand reputation, exclusivity, price and consumer preferences distinguish them from mass-market products.

B. Geographic market

The relevant geographic market may be:

Morocco as a whole.

Particular regions or cities.

A narrower area where distribution conditions differ materially.

The analysis should consider import arrangements, transport costs, distribution contracts, retail networks and consumer purchasing patterns.

C. Distribution-level market

Three levels deserve separate consideration:

Importation and wholesale distribution.

Authorised selective retail distribution.

Independent retail and online distribution.

A company controlling all three levels may possess considerable vertical market power.

4. Major Competition Concerns

A. Horizontal concentration

Horizontal concentration occurs when competing perfume distributors merge or one acquires another.

Example:

Two major Moroccan perfume wholesalers independently supply luxury fragrance retailers. One acquires the other.

Potential consequences include:

Reduction in the number of wholesale suppliers.

Increased wholesale prices.

Reduced bargaining power of retailers.

Elimination of competing distribution networks.

Greater control over premium perfume brands.

The Competition Council must assess whether sufficient alternative suppliers remain.

B. Vertical integration

Vertical integration occurs when a perfume manufacturer or importer acquires a retailer or wholesale distributor.

For example, an international perfume supplier might acquire a Moroccan retail chain.

Potential concerns include:

Preferential access to popular brands.

Discriminatory supply conditions.

Exclusion of independent retailers.

Access to competitors' commercially sensitive information.

Reduced opportunities for alternative perfume suppliers.

Vertical integration is not inherently unlawful. Its competitive effects must be established.

C. Exclusive distribution agreements

Exclusive distribution agreements can protect investment in brand promotion, product authenticity and customer service.

However, excessive exclusivity can prevent competing distributors from entering the market.

The Council should investigate whether exclusive arrangements:

Cover an excessive geographical area.

Prevent alternative sources of supply.

Restrict parallel imports.

Prevent retailers from purchasing competing brands.

Operate collectively to foreclose rival distributors.

D. Selective distribution

Luxury perfume manufacturers commonly require authorised retailers to meet qualitative requirements.

Legitimate requirements may include:

Appropriate retail premises.

Trained sales personnel.

Product storage standards.

Authenticity guarantees.

Customer-service standards.

Appropriate presentation of luxury products.

However, admission requirements must not become a mechanism for excluding otherwise qualified independent retailers.

E. Resale price maintenance

A perfume distributor may recommend retail prices to authorised retailers.

However, under Article 7, directly or indirectly imposing minimum resale prices can constitute abuse where the relevant conditions are established.

Examples include:

Penalising retailers for discounting.

Withholding supplies because of promotional pricing.

Monitoring retailers to enforce minimum prices.

Imposing contractual minimum resale margins.

Retailers should retain genuine commercial freedom to determine their selling prices.

5. Moroccan Regulatory Developments: Directly Relevant Perfume and Cosmetics Matters

Particularly important Moroccan developments

Morocco has an unusually relevant recent enforcement development concerning luxury perfume distribution.

A. Competition Council investigation of selective perfume distribution – 5 May 2026

On 5 May 2026, the Moroccan Competition Council announced that it had received a complaint from a company operating in the cosmetics and perfumery market.

The investigation concerned alleged anti-competitive practices in the national market for selective distribution of luxury perfumes and cosmetics.

The Council identified several structural characteristics:

Exclusive territorial distribution agreements.

Vertical integration between importation, wholesale distribution and retail.

Dependence of retailers on authorised distribution networks.

Potential discrimination against independent retailers.

Restrictions on access to certain products.

The Council also indicated that its investigation had identified concerns extending beyond the original complaint to the overall functioning of the market.

Conseil de la concurrence du Maroc

B. Proposed commitments in the perfume distribution investigation

The companies concerned proposed commitments under Article 36 of Law No. 104-12.

These included:

The Council invited interested third parties to submit observations during the market-testing process.

Importantly, these were proposed commitments, not findings that every investigated practice had already been legally established as an infringement. Nor should the proposals be confused with a final decision making all commitments binding.

Conseil de la concurrence du Maroc

This investigation is particularly significant because it directly concerns the structure of Morocco's luxury perfume distribution market.

C. L'Oréal–Kering Beauté concentration – January 2026

The Moroccan Competition Council published a notification concerning the proposed acquisition by L'Oréal of exclusive control over Kering Beauté.

The transaction involved:

Acquisition of 100% of Kering Beauté's shares.

Ownership of Fontaine Ltd, the parent company of the Creed luxury perfume group.

Licensing arrangements concerning Bottega Veneta and Balenciaga beauty products.

The relevant economic sector was the production and wholesale sale of luxury perfumes and cosmetics.

The Council invited interested third parties to submit observations.

Conseil de la concurrence du Maroc

Competition-law significance: This transaction illustrates why the acquisition of a perfume brand owner must be examined alongside the buyer's existing portfolio, wholesale activities, brand licensing arrangements and distribution relationships.

D. H&S Retail Holding–B5 Cosmetics concentration – March 2026

Another relevant transaction involved H&S Retail Holding SA acquiring exclusive control of B5 Cosmetics SARL through the acquisition of 100% of its share capital and voting rights.

The transaction concerned cosmetics distribution.

The Council published the notification and invited third-party observations.

Conseil de la concurrence du Maroc

Competition-law significance: Although the transaction concerned cosmetics rather than perfume distribution specifically, it demonstrates the importance of examining ownership links between distributors operating in overlapping beauty-product markets.

6. Important Case Laws

The following cases provide useful legal principles for analysing perfume distribution concentration. The distinction between Moroccan authorities and foreign comparative precedents is important: foreign judgments are persuasive analytical references, not binding Moroccan judgments.

Case 1. Casablanca Commercial Court of Appeal – Exclusive Distribution and Parallel Imports (2010)

Court: Casablanca Commercial Court of Appeal.

Decision: No. 4982, 16 November 2010.

Case No.: 4301/2008/17.

Legal principle: Exclusive distribution, parallel imports and unfair competition.

The dispute concerned the violation of an exclusive distribution network by a third party and the relationship between exclusive distribution arrangements and parallel imports of authentic products.

The decision is relevant to the perfume industry because luxury fragrance distributors frequently rely on territorial exclusivity and authorised distribution networks.

Application to Morocco: An exclusive perfume distributor may seek protection against conduct amounting to unfair competition. However, contractual exclusivity should not automatically be treated as a competition-law justification for excluding all alternative sources of genuine products.

Jurisprudence

Case 2. Metro SB-Großmärkte GmbH v Commission (Case 26/76, 1977)

Court: European Court of Justice.

Legal principle: Selective distribution systems.

The Court recognised that selective distribution may be compatible with competition law where selection is based on objective qualitative criteria, applied uniformly and without discrimination, and does not go beyond what is necessary.

Application to Morocco: Luxury perfume manufacturers may impose genuine quality standards on authorised retailers, provided the requirements are objective, proportionate and consistently applied.

Case 3. Consten and Grundig v Commission (Joined Cases 56/64 and 58/64, 1966)

Court: European Court of Justice.

Legal principle: Absolute territorial protection.

The Court addressed exclusive distribution arrangements that sought to eliminate parallel trade and protect national markets from competing imports.

Application to Morocco: A perfume manufacturer should not use distribution contracts to create absolute territorial barriers that eliminate competition from alternative genuine-product suppliers.

Case 4. Pierre Fabre Dermo-Cosmétique (Case C-439/09, 2011)

Court: European Court of Justice.

Legal principle: Online sales restrictions in selective distribution.

The Court examined a restriction that effectively prohibited distributors from selling cosmetic products online.

It held that a general prohibition of internet sales could constitute a restriction of competition by object under the applicable EU competition rules.

Application to Morocco: A luxury perfume distributor should not automatically prohibit authorised retailers from selling online. Restrictions must be assessed against their legitimate objectives and competitive effects.

Case 5. Coty Germany GmbH v Parfümerie Akzente GmbH (Case C-230/16, 2017)

Court: European Court of Justice.

Legal principle: Protection of luxury-brand image.

The Court recognised that a selective distribution system designed to preserve the luxury image of products may be compatible with competition law if the relevant criteria are objective, uniform, non-discriminatory and proportionate.

It also examined restrictions on sales through third-party online platforms.

Application to Morocco: Luxury perfume suppliers may protect brand presentation and product quality, but cannot use luxury positioning as a blanket justification for excluding competing retailers.

Case 6. Pronuptia de Paris GmbH v Pronuptia de Paris Irmgard Schillgallis (Case 161/84, 1986)

Court: European Court of Justice.

Legal principle: Legitimate commercial restrictions in distribution systems.

The Court distinguished restrictions necessary to preserve the identity and reputation of a franchise network from restrictions that improperly limit competition.

Application to Morocco: A perfume franchise may impose reasonable standards concerning brand identity, presentation and customer experience. Restrictions unrelated to protecting the network's legitimate functioning require separate competition assessment.

Case 7. Delimitis v Henninger Bräu (Case C-234/89, 1991)

Court: European Court of Justice.

Legal principle: Cumulative foreclosure resulting from exclusive supply agreements.

The Court examined whether networks of exclusive purchasing arrangements could make market entry difficult for competing suppliers.

Application to Morocco: If multiple perfume distributors maintain overlapping exclusive arrangements with major international brands, the cumulative effect may prevent new distributors from obtaining commercially viable supplies.

7. Economic Analysis of Perfume Distribution Concentration

Competition authorities should consider more than the number of perfume distributors.

A. Market concentration

The Herfindahl-Hirschman Index (HHI) can help evaluate the distribution of market shares.

\[ HHI=\sum_{i=1}^{n}s_i^2 \]

Where \(s_i\) represents the market share of each distributor expressed as a percentage.

For example:

\[ HHI=40^2+30^2+20^2+10^2=3000 \]

Illustrative example only

An HHI of 3,000 indicates substantial concentration in this hypothetical market. It is an economic screening indicator, not an automatic finding of illegality under Moroccan law.

B. Barriers to entry

The Council should consider:

Exclusive import licences and distribution agreements.

International brand-owner approval requirements.

High initial investment.

Advertising and marketing expenditure.

Access to shopping-centre locations.

Product authenticity verification.

Inventory and warehousing costs.

Limited availability of luxury perfume brands.

C. Consumer welfare

The authority should investigate whether concentration leads to:

Higher perfume prices.

Reduced product variety.

Reduced availability of niche fragrances.

Lower-quality customer service.

Reduced promotional competition.

Fewer online purchasing alternatives.

8. Remedies and Enforcement Measures

Where anti-competitive effects are established, the Moroccan Competition Council may consider several remedies.

Structural remedies

Divestiture of overlapping distribution businesses.

Disposal of certain retail assets.

Separation of competing distribution operations.

Behavioural remedies

Non-discriminatory access to distribution networks.

Transparent retailer admission criteria.

Prohibition of unjustified tying.

Protection of retailer pricing independence.

Restrictions on exchanges of sensitive commercial information.

Reasonable access to exclusive product ranges.

Merger-control remedies

Under the relevant concentration provisions, the Council can authorise a transaction subject to commitments, impose requirements to restore sufficient competition, or prohibit the concentration where the statutory conditions are met.

9. Practical Hypothetical Case Study

Consider a situation in which three major perfume distributors operate in Morocco.

Distributor A acquires Distributor B, which previously competed with it in the importation and wholesale distribution of luxury perfumes.

Following the transaction:

The merged entity controls 65% of luxury perfume wholesale distribution.

Independent retailers depend on the merged entity for access to popular international brands.

The merged company imposes restrictive supply conditions.

Independent retailers are required to purchase less popular products to obtain access to high-demand fragrances.

Retailers are discouraged from offering discounts.

Legal analysis:

The Competition Council should examine the merger's effect on competition, the availability of alternative suppliers, the commercial dependence of independent retailers and the possibility of effective remedies.

If the merger has not yet been completed, the parties should satisfy applicable prior-notification and standstill obligations.

10. Compliance Recommendations for Perfume Distributors

Moroccan perfume distributors should adopt the following measures:

Conduct merger-control assessments before acquisitions.

Notify qualifying concentrations before implementation.

Maintain objective and transparent selective distribution criteria.

Avoid unjustified territorial exclusivity.

Preserve genuine retailer freedom over resale prices.

Avoid tying strategic perfumes to unrelated products.

Establish safeguards for commercially sensitive information.

Apply equivalent supply conditions to similarly situated retailers.

Review online distribution restrictions.

Establish internal competition compliance programmes.

11. Conclusion

Competition law governing perfume distribution concentration in Morocco seeks to balance legitimate commercial interests in luxury-brand protection with the preservation of effective market competition.

Law No. 104-12 provides the principal framework through its provisions on restrictive agreements, abuse of dominance, economic concentration and merger remedies.

The Moroccan Competition Council's 2026 investigation into selective distribution of luxury perfumes and cosmetics is particularly significant. It demonstrates that the Council is examining not only individual restrictive agreements but also the structural relationship between international suppliers, importers, wholesalers and independent retailers.

The central legal principle is that commercial exclusivity and market concentration are not automatically unlawful, but they cannot be used to eliminate effective competition, discriminate unjustifiably against independent retailers or create artificial barriers to market entry.

12. Key Legal Authorities at a Glance

Overall assessment: The most important Moroccan authority for this particular subject is the Competition Council's 5 May 2026 investigation into luxury perfume and cosmetics selective distribution. It is more directly relevant to contemporary Moroccan market conditions than the older comparative European judgments. It should, however, be cited as an enforcement investigation and commitments process, not as a final infringement judgment.