EU: EC settles anti-trust case wth Coke
The European Commission has announced that it has reached a wide-ranging agreement with Coca-Cola Enterprises related to commercial practices that have been under investigation since 1999.
The agreement was reached after an undertaking by The Coca-Cola Company, Coca-Cola Enterprises, and other European Coca-Cola bottlers to make certain changes to the way they trade in Europe.
Over the past five years, the Competition Directorate of the European Commission has been conducting an investigation into various commercial practices of The Coca-Cola Company and certain Coca-Cola Bottlers in Austria, Belgium, Denmark, Germany and Great Britain.
In the last few months, The Coca-Cola Company and certain of its Bottlers began a dialogue with the Commission Services to identify and address the commercial practices understood to be under review.
During the summer, the Companies submitted draft proposals addressing all such practices. The Commission subsequently shared these proposals with retailers and other beverage suppliers involved in the non-alcoholic beverage market.
The Undertaking will potentially apply in 27 EEA countries and in all channels of distribution where the carbonated soft drinks of The Coca-Cola Company account for over 40 percent of national sales and twice the nearest competitor's share. It will take more than 12 months to fully implement the undertaking and for the market to react to any resulting changes.
The commitments relate broadly to exclusivity, percentage-based purchasing commitments, transparency, target rebates, tying, assortment or range commitments and agreements concerning products of other suppliers. The Undertaking will also apply to shelf space commitments in agreements with take-home customers and to financing and availability agreements in the on- premise channel. In addition, the undertaking includes commitments that will be applicable to commercial arrangements concerning the installation and use of technical equipment (i.e., coolers, fountain equipment, and vending machines).
"This agreement with the Commission gives us an accepted operating framework in our European territories," said John R. Alm, president and chief executive officer of CCE. "We look forward to meeting the growing needs of our customers and consumers as we work within its guidelines."
A statement said the Commission intends publishing this Undertaking under its new antitrust Regulation (EC) No 1/2003 for third- party comments before it becomes final.
Neville Isdell, chairman and chief executive officer of The Coca-Cola Company, was in Brussels yesterday to meet with Commissioner Monti and to present the Undertaking on behalf of The Coca-Cola Company and its EEA bottlers.
Isdell said: "We welcome the Commission's announcement today. The commitments given by the company and its bottlers meet their concerns and will bring an end to the investigation. We are confident that we have demonstrated our commitment to finding solutions that address the Commission's concerns. We have always sought to compete fairly in an increasingly competitive European non-alcoholic beverage marketplace, and I believe this Undertaking provides clarity to the application of Community competition rules to our commercial practices. We look forward to a constructive and close working relationship with the European Commission in the future."
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