European Commission reins in Coca-Cola |
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Fri, 24 Jun 2005 04:35
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The European Commission today said that consumers could now exercise their choice over fizzy drinks after Coca-Cola were hauled in for questionable marketing practices.
EU Competition Commissioner Neelie Kroes said, " 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 EU started the six-year probe after a complaint by No. 2 rival PepsiCo Inc that Coke was using unethical methods to keep its market position intact. It was alleged that Coca-Cola was using rebates to persuade retailers to keep competing products such as Pepsi, Sprite and Vanilla Coke off their shelves.
Coke has managed to avoid a fine, but had to agree to the premise that whenever it supplied a fridge to retailers who did not own one, 20 percent of its shelf space must be reserved for products of other companies.
The agreement covers 27 European countries and will be legally binding until 2010. If Coke goes contrary to the ruling, it will be liable to be fined 10 percent of its annual turnover. A Coke spokesman said, "It is all about the consumers wanting what we provide and if consumers want our brands then retailers will stock them. If we do that, we will play by the rules and be successful."
Coca-Cola Chief Executive Neville Isdell said, "We welcome today's decision, which marks the conclusion of a six-year investigation. We now have clarity regarding the application of European competition rules to our commercial practices."
Commenting on the ruling, PepsiCo Inc. spokesman Dick Detwiler said, "Now, retailers across Europe will be free to stock a choice of soft drinks, which is great news for consumers."
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