LOCAL exporters have been warned to ignore the Competition Act and various other European-led directives at their peril.

Mr Tony Brown, Export Development Counsellor for Business Link Rochdale, stressed the point when he addressed a recent meeting of Bolton and Bury Chamber's Export Club.

He identified the pitfalls of ignoring legislation and advised businesses on how to arrange distribution and agency agreements to minimise commercial and legal risk.

He said: "Manufacturers who dictate who their distributors should sell to, and how much they should charge, are falling foul of the new Competition Act and risk being fined 10 per cent of their annual turnover.

"With that sort of penalty at stake, it is vital to ensure that your distribution agreements are worded with extreme care."

He also advised businesses to take expert advice in drawing up contracts for agents -- both within the UK and Europe.

Recent legislation has given UK agents rights to two years' commission if they are dismissed, but by specifying "indemnity" severance rather than "compensation" severance within a contract, businesses can limit their liability to one year's commission payments.

The choice between indemnity and compensation was unique to the UK, he said.