Frequently, a manufacturer or supplier desires to place restrictions on its distributor's ability to freely resell the manufacturer's or supplier's goods. For example, a manufacturer may insist that a distributor sell or not sell to certain customers, in certain areas, at certain locations, or in a "primary area of responsibility". These restrictions can be enforced by the manufacturer through cutting off supplies of goods, terminating the distributor or dealing more favourably with other distributors.
Like exclusive distributorships, the law generally permits restrictions on the distributor's ability to resell the products.
Resale Price Maintenance is not Prohibited
"Resale price maintenance" is not unlawful in Hong Kong. Resale price maintenance involves the direct or indirect requirement by a manufacturer that its distributor or dealer resell the goods at a minimum set price or price level.