Territorial supply constraints (TSCs) are back under review in the European Union, as national competition authorities and policymakers push for stronger tools to tackle barriers that fragment the internal market.
TSCs arise in vertical agreements—such as distribution or supply contracts—where suppliers restrict the geographic areas in which distributors or buyers can sell goods. While often embedded in commercial arrangements, these practices can have far-reaching consequences for cross-border trade within the EU.
A Structural Barrier to the Single Market
By limiting where products can be resold, territorial supply constraints can prevent businesses and consumers from purchasing goods in one Member State and selling or using them in another. This undermines one of the core principles of the EU: the free movement of goods.
Authorities increasingly view TSCs as a major obstacle to market integration, with some classifying them among the most harmful barriers to intra-EU trade. Although EU competition law can address such restrictions when they stem from anti-competitive agreements or abuse by dominant firms, enforcement gaps remain.
In particular, many restrictive practices fall outside traditional antitrust rules when they are implemented by companies that do not hold a dominant market position—leaving regulators with limited tools to intervene.
Evidence from Greece Highlights Market Fragmentation
The Hellenic Competition Commission has been actively examining the issue. Its recent analyses include comparative retail price studies between Greece and other EU countries, as well as sectoral research into the lack of parallel trade in key agricultural inputs.
These findings suggest that limited cross-border trade contributes to persistent price differences and reduced competition, particularly in essential consumer goods markets. The authority has emphasized that improving access to products across Member States would benefit retailers, wholesalers, and ultimately consumers.
Growing Momentum at EU Level
The issue has gained political traction at the European level. The European Parliament has called on the European Commission to take decisive action against territorial restrictions affecting everyday goods.
Greece has been among the Member States advocating for reform, consistently supporting stronger intervention since 2024 and contributing to ongoing policy discussions.
Towards New Legislative Tools?
In response to the European Commission’s call for evidence on a potential impact assessment, the Greek competition authority has proposed a more proactive regulatory approach. Specifically, it argues for legislation that would pre-identify certain harmful practices as prohibited.
Such a framework would allow authorities to address restrictive conduct even when it is carried out by non-dominant firms—closing a key enforcement gap in current competition law.
Balancing Market Integration and Commercial Freedom
The debate over TSCs reflects a broader tension within EU competition policy: how to preserve commercial flexibility in distribution systems while preventing practices that partition the internal market.
As the European Commission evaluates potential legislative action, territorial supply constraints are likely to remain a central issue in efforts to deepen economic integration and ensure that consumers and businesses can fully benefit from the single market.
