EU Regulators Force Coke to Let Rivals into Sales Fridges

23 June 2005

Following a six-year probe into Coca-Cola's sales practices within the European Union, the European Commission has imposed a legally binding agreement on the global soft drinks giant - which currently holds around 50% of the European soft drinks market.

The investigation, completed last October, found that Coke's business practices suffocated competition. Especially its deals with retail outlets, cafés and bars that guaranteed Coke product-exclusivity. From now on, at least 20% of the space within the cold cabinets must be allocated to competing brands.

Equally unpopular with the regulators was the Atlanta-headquartered colossus's habit of binding retailers to a set of restrictive sales agreements, whereby outlets selling Coke were also compelled to stock less popular brands such as Sprite and Vanilla Coke.

Coke's legion of corporate lawyers has managed to protect the company from financial penalties for its restrictive practices but it is being forced to amend its business methods across the 27 nations that comprise the European Union.

The agreement will have force of law until 2010 at earliest and Coke faces potential fines of up to 10% of annual turnover if it does not observe the requirements of the ruling.

Crows Neelie Kroes, the EU Competition Commissioner: "This decision will benefit will benefit consumers by improving competition in the markets for carbonated soft drinks in Europe Consumers will be able to choose from a larger range of fizzy drinks at competitive prices."

Coca-Cola welcomed the fact that the ruling had made its obligations crystal clear. It is not known whether it did so through gritted teeth.

Data sourced from BBC Online; additional content by WARC staff