More fizzy drinks choice after Commission deal
The European Commission today promised consumers more choice of fizzy drinks at fair prices after curbing the “exclusive” marketing methods of Coca-Cola.
From today agreements already reached with Coca-Cola to open up fizzy drinks competition become law.
EU Competition Commissioner Neelie Kroes commented: “This decision will benefit consumers by improving competition in the markets for carbonated soft drinks in Europe. Thanks to the Commission’s decision, consumers will be able to choose from a larger range of fizzy drinks at competitive prices.”
The drinks giant and the Commission have reached a deal ending Coca-Cola’s “exclusivity” arrangements with shops and pubs stocking its brands. A Commissioner statement said: “At all times, Coca-Cola customers will remain free to buy and sell carbonated soft drinks from any supplier of their choice.”
The only exception is where large, private sector customers or public authorities organise a competitive tender for their supplies and Coca-Cola provides the best offer, Under those conditions, the company can be the only fizzy drinks supplier.
But the company can no longer offer rebates to shop and pub managers or owners for achieving certain sales targets. And it cannot oblige retailers to take Coca-Cola’s less popular products as well as its most popular drinks.
For example, Coca-Cola cannot insist that a retailer wanting to stock regular Coke or Fanta Orange must also stock other Coca-Cola products such as Sprite or Vanilla Coke. And it cannot offer rebates to encourage retailers to buy the less-popular sellers or to reserve shelf space for the entire group of Coca-Cola products.
And where Coca-Cola provides a free fridge to a retailer for display and promotion purposes, the company must allow up to 20% of the space to be used for any other product. The rule applies where there is no other “chilled beverage capacity” on the premises to which shoppers have direct access, and which is suitable for competing fizzy drinks.
The legally-binding commitments cover the 25 EU countries, Iceland and Norway, and remain in force until the end of 2010.
“During this period, the commitments will be applicable in those countries where Coca-Cola has a particularly strong market position. Each year, a list of countries where the commitments apply will be published on the Commission’s and Coca-Cola’s websites.
A Commission spokesman said Brussels had power to fine Coca-Cola up to 10% of its total worldwide turnover if the company breaks the rules.
