Not defending the zone pricing, but this is how they enforce it.
1) dealer loses his dealership. Big disincentive for selling outside of zone
2) you end up on the Do Not sell To List. This means you can't buy products from any company that uses the aggrieved companies traits. The list is available to all dealers, and the parent companies will usually reject the order if they see that name or address come up.

I have seen this done a couple of times. I was a new salesman in an area and thought I had hit a home run with a new customer, only to find out he couldn't buy Monsanto traits because he got caught saving beans. They cancelled the order and sent the lawyers after the farmer.