19 May 2000

European Commission officials yesterday carried out dawn raids on the London and Brussels offices of Coca-Cola's largest European bottler, Coca-Cola Enterprises - the second set of raids on Coke’s European premises within a year. Previous investigations have centred on Coca-Cola bottlers in Germany, Austria and Denmark, whereas CCE trades in the UK, France and Benelux countries.

The move marks an extension of last year’s investigation into the possible abuse by Coke of its dominant position in the European market. The inquiry is believed to stem from rivals’ complaints, in particular from PepsiCo and Virgin Cola. Among the practices under scrutiny are Coke’s payment of loyalty bonuses and retailer exclusivity agreements. If found guilty, the Atlanta-based global giant could be fined up to 10% of its EC turnover.

Coca-Cola insists that its product competes with the whole of the soft drinks market, including tea, coffee and bottled water - not just with other colas. Said an Atlanta-based Coke spoke: "[The company] is disappointed the European Commission felt the need to execute a dawn raid." However, it was not surprised at the action, given that the EC "has a continuing investigation into the Coca-Cola system in several countries in Europe."

News source: Financial Times