CONCENTRATION, MARKETING ARRANGEMENTS AND COMPETITION (II)
Although they are referred to as sole agents, the firms holding sole distributing rights often act as principals and not as agents. They own the stocks they carry, assume the credit and other trading risks, and may bear a substantial proportion of the cost of promoting the brand. Moreover, the sole distributor is usually free to determine the price at
Many branded commodities sold in West Africa are subject to sole agencies. They include the leading motor-cars, lorries, bicycles, tractors, tyres and also matches. A variant of the sole agency agreement is the practice of granting overriding commissions to a firm on all sales in a particular territory, whether effected by that firm or by another firm. This applies to many products, including certain petroleum products, cigarettes and some alcoholic drinks, including certain brands of beer and gin.