Commission restricts Coke's dealings in Europe
Under the deal, Coke will not be able to strike exclusivity arrangements in Europe that stop them from serving rival brands, or offer them rebates for buying more of its brands.
22/06/05 The European soft drinks market will open up much wider following the news that the European Commission has completed its six-year probe into Coca-Cola’s dealings on the continent.
Under the deal, Coke will not be able to strike exclusivity arrangements in Europe that stop them from serving rival brands, or offer them rebates for buying more of its brands. Coke will have to reserve up to 20 percent of its cooler space for rivals in locations where retailers have only a Coca-Cola cooler from which to sell chilled beverages. Coke will also not be allowed to force retailers to stock its less popular brands alongside Coke.
"This decision will benefit consumers by improving competition in the markets for carbonated soft drinks in Europe," said EU Competition Commissioner Neelie Kroes. "Thanks to the Commission's decision, consumers will be able to choose from a larger range of fizzy drinks at competitive prices."
The Commission also gave the US soft drink giant a stern warning. If they ever found that the company broke its commitments it could impose a fine of up to 10 percent of the company's worldwide turnover.
The deal was announced in October by then-Competition Commissioner Mario Monti, but it took time to check the impact on customers and competitors and fine tune the details. The Undertaking will apply across 27 counties in Europe, in all channels of distribution where the carbonated soft drinks of Coke account for over 40% of national sales and twice the nearest competitor’s share.
Coca-Cola CEO Neville Isdell said that he welcomed the decision, noting that the company now has clarity regarding the application of European competition rules to its commercial practices in the European Economic area (EEA).
