CONSULTATION PROCESS FOR OPERATIONAL TERMS. The Authority proposes that distributors would consult on the proposed operational terms with those retailers that currently trade on their network. While it might be envisaged that this would largely be a process of simply transferring existing operational terms across to the new DDA framework, it will inevitably be necessary to consider each clause carefully to ensure that there are no unintended consequences from what might seem to be minor wording changes. The process proposed by the Authority would see the four largest distributors consulting on operational terms over a 60 day period, with the remaining 23 distributors having 120 days for this same process. A trader that is active on multiple networks may therefore be engaged in consultation with the four large distributors and several of the smaller distributors at the same time. Parallel negotiations may be difficult for a retailer that trades on multiple distribution networks. While this problem is noted by the Authority (in paragraph 3.4.11), it is not obvious that the Authority’s proposed process adequately addresses the problem. The alternative approach proposed in 2.2 above is likely to significantly reduce this problem: those distributors that already have a UoSA acceptable to the contracted retailers would not need to consult on operational terms for a DDA; instead, it would only be those distributors for which a retailer can demonstrate a material benefit from a DDA that would be required to embark on the Authority’s consultation process.
