On February 15, 2017, the Korea Fair Trade Commission (“KFTC”) announced the Standard Distribution Agreement for transactions between suppliers and distributors in the food & beverage (“F&B”) industry.

Why significant:

While currently limited to the F&B industry, the publication of the Standard Distribution Agreement is meaningful, because it is the first standard distribution agreement announced by the KFTC since the enactment of the “Fairness in Distributor Transactions Act” (the “FDTA”) in December 2016.

This provides a standard for what should be deemed fair terms of a distribution agreement and how the FDTA will be enforced in the future. A prudent exercise may be to compare the terms of the Standard Distribution Agreement with the distribution agreement used by your company in preparation for potential future enforcement of the FDTA and other relevant laws.

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