Coca-Cola Cedes to EU on Marketing Antitrust Issues

20 October 2004

Coca-Cola chief executive Neville Isdell flew into Brussels Tuesday to cement a deal with European Union competition commissioner Mario Monti.

Isdell finally settled the five year dispute with two major concessions: a commitment to end its controversial dealer discount scheme; plus an agreement to share more retail display space with rivals including US compatriot brand PepsiCola.

The climb-down is due less to a change of heart than a change in Coke's bottom line. Following a profits warning in September, the beverages behemoth will report Thursday a significant fall in Q3 earnings. It will also avoid a massive fine and years of further legal dispute.

The settlement will also allow Coca-Cola to concentrate on reversing a serious downturn in its German business and ignite a rocket beneath torpid Northern European sales.

PepsiCo declared itself "satisfied" with the outcome.

Data sourced from Wall Street Journal Online; additional content by WARC staff