# C_2004289EN.01001001.xml

| 26.11.2004 | EN | Official Journal of the European Union | C 289/10 |
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26.11.2004

EN

Official Journal of the European Union

C 289/10

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Notice published pursuant to Article 27(4) of Council Regulation (EC) No 1/2003 in Case COMP/A.39.116/B2 — Coca-Cola

(2004/C 289/08)

(Text with EEA relevance)

1.   Introduction

| (1) | The European Commission has received a set of commitments formally endorsed by ‘The Coca-Cola Company’ (TCCC) and its three most important bottlers in the EEA, ‘Coca-Cola Hellenic Bottling Company’, ‘Coca-Cola Enterprises’ and ‘Coca-Cola Erfrischungsgetränke AG’, together ‘the Companies’. These commitments have been made in the course of a Commission investigation into the Companies' business practices across the European Community, Norway and Iceland in the context of Article 82 of the EC Treaty and Article 54 of the EEA Agreement. |
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(1)

The European Commission has received a set of commitments formally endorsed by ‘The Coca-Cola Company’ (TCCC) and its three most important bottlers in the EEA, ‘Coca-Cola Hellenic Bottling Company’, ‘Coca-Cola Enterprises’ and ‘Coca-Cola Erfrischungsgetränke AG’, together ‘the Companies’. These commitments have been made in the course of a Commission investigation into the Companies' business practices across the European Community, Norway and Iceland in the context of Article 82 of the EC Treaty and Article 54 of the EEA Agreement.

| (2) | By means of the present publication, the Commission intends to market test the Companies' current proposal for commitments, which purport to address the Commission's competition concerns expressed in its preliminary assessment with regard to the investigated practices of the Companies. Subject to the outcome of the present market test, the Commission intends to adopt a decision pursuant to Article 9(1) of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty (1), to make those proposed commitments which meet the concerns expressed by the Commission in its preliminary assessment binding on the Companies. Such a decision would not conclude whether or not there has been or still is an infringement. |
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(2)

By means of the present publication, the Commission intends to market test the Companies' current proposal for commitments, which purport to address the Commission's competition concerns expressed in its preliminary assessment with regard to the investigated practices of the Companies. Subject to the outcome of the present market test, the Commission intends to adopt a decision pursuant to Article 9(1) of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty (1), to make those proposed commitments which meet the concerns expressed by the Commission in its preliminary assessment binding on the Companies. Such a decision would not conclude whether or not there has been or still is an infringement.

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2.   Preliminary assessment

| (3) | The Commission has informed the Companies by letter of 18 October 2004 of its preliminary assessment within the meaning of Article 9(1) of Regulation (EC) No 1/2003. |
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(3)

The Commission has informed the Companies by letter of 18 October 2004 of its preliminary assessment within the meaning of Article 9(1) of Regulation (EC) No 1/2003.

| (4) | Pursuant to the preliminary assessment, TCCC and its respective bottlers jointly hold a dominant position in certain of the national markets for the supply of carbonated soft drinks (CSDs) in the EC, Norway and Iceland and this in at least one of the two distribution channels: the take-home channel (supermarkets and other retail outlets), and the on-premises channel, also known as the away-from-home, horeca (catering) or gastronomy channel (2). |
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(4)

Pursuant to the preliminary assessment, TCCC and its respective bottlers jointly hold a dominant position in certain of the national markets for the supply of carbonated soft drinks (CSDs) in the EC, Norway and Iceland and this in at least one of the two distribution channels: the take-home channel (supermarkets and other retail outlets), and the on-premises channel, also known as the away-from-home, horeca (catering) or gastronomy channel (2).

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| (5) | The practices raising concerns relate, with respect to both distribution channels, to exclusivity requirements, rebates granted on condition that the clients reach, on a quarterly basis, individually specified purchase thresholds separately set for colas and non-colas, tying arrangements and arrangements requiring the clients to carry for sale a range of cola stock-keeping units (SKUs) and/or non-cola SKUs. In the take-home channel, the Companies apply shelf space arrangements whereby the supermarkets reserve a large part of their CSD shelf space for TCCC-branded products. In the on-premises channel, customers receive up-front financing conditional upon their purchase of TCCC-branded products over a number of years. Moreover, the Companies have also attached certain exclusivity-related restrictions to the installation of technical sales equipments such as beverage coolers, fountain dispensers or vending machines. |
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(5)

The practices raising concerns relate, with respect to both distribution channels, to exclusivity requirements, rebates granted on condition that the clients reach, on a quarterly basis, individually specified purchase thresholds separately set for colas and non-colas, tying arrangements and arrangements requiring the clients to carry for sale a range of cola stock-keeping units (SKUs) and/or non-cola SKUs. In the take-home channel, the Companies apply shelf space arrangements whereby the supermarkets reserve a large part of their CSD shelf space for TCCC-branded products. In the on-premises channel, customers receive up-front financing conditional upon their purchase of TCCC-branded products over a number of years. Moreover, the Companies have also attached certain exclusivity-related restrictions to the installation of technical sales equipments such as beverage coolers, fountain dispensers or vending machines.

| (6) | According to the preliminary assessment, all practices have made access to the outlets more difficult for competitors to the ultimate detriment of consumers. The preliminary assessment noted in particular that the Companies could use the market power of their strong brands and the wide product portfolio as leverage to maintain and expand their market position. |
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(6)

According to the preliminary assessment, all practices have made access to the outlets more difficult for competitors to the ultimate detriment of consumers. The preliminary assessment noted in particular that the Companies could use the market power of their strong brands and the wide product portfolio as leverage to maintain and expand their market position.

3.   Commitments

| (7) | The commitments are briefly summarised in what follows and published in full in a non-confidential English version on the website of the Directorate-General for Competition:
  http://europa.eu.int/comm/competition/antitrust/cases/decisions/39116/tccc_final_undertaking_041019.pdf |
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(7)

The commitments are briefly summarised in what follows and published in full in a non-confidential English version on the website of the Directorate-General for Competition:

http://europa.eu.int/comm/competition/antitrust/cases/decisions/39116/tccc_final_undertaking_041019.pdf

| (8) | The Companies propose to apply the commitments in all Member States, Norway and Iceland insofar as TCCC-branded CSDs accounted, in the previous year, for more than 40 %, and more than twice the share of the nearest competitor, of national CSD sales in either the take-home channel or the on-premises channel. |
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(8)

The Companies propose to apply the commitments in all Member States, Norway and Iceland insofar as TCCC-branded CSDs accounted, in the previous year, for more than 40 %, and more than twice the share of the nearest competitor, of national CSD sales in either the take-home channel or the on-premises channel.

| (9) | With respect to both distribution channels, the Companies commit:






  — | not to impose any exclusivity provisions on their customers, |
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(9)

With respect to both distribution channels, the Companies commit:

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not to impose any exclusivity provisions on their customers,

| — | not to offer any target rebates for TCCC-branded CSDs, that is to say any rebates or other advantages in exchange for a customer's reaching individually specified purchase thresholds, |
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not to offer any target rebates for TCCC-branded CSDs, that is to say any rebates or other advantages in exchange for a customer's reaching individually specified purchase thresholds,

| — | not to impose any tying arrangements making the supply of any TCCC-branded cola CSD or TCCC-branded orange CSD conditional on the purchase of one or more additional TCCC-branded beverages, |
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—

not to impose any tying arrangements making the supply of any TCCC-branded cola CSD or TCCC-branded orange CSD conditional on the purchase of one or more additional TCCC-branded beverages,

| — | to define any assortment and range arrangements separately for TCCC-branded regular cola CSDs, TCCC-branded light cola CSDs and TCCC-branded orange CSDs. Whenever the commitments indicate the separate treatment of TCCC-branded orange CSDs, this only applies in countries where 'Fanta Orange Regular' accounted, in the previous year, for more than twice the share of the nearest competing brand of orange-flavoured CSDs in either the take-home channel or the on-premises channel, |
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to define any assortment and range arrangements separately for TCCC-branded regular cola CSDs, TCCC-branded light cola CSDs and TCCC-branded orange CSDs. Whenever the commitments indicate the separate treatment of TCCC-branded orange CSDs, this only applies in countries where 'Fanta Orange Regular' accounted, in the previous year, for more than twice the share of the nearest competing brand of orange-flavoured CSDs in either the take-home channel or the on-premises channel,

| — | not to make the supply of any TCCC-branded CSDs or the extent of any advantage conditional on the customer discontinuing, reducing or varying the relationship with any other supplier. |
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not to make the supply of any TCCC-branded CSDs or the extent of any advantage conditional on the customer discontinuing, reducing or varying the relationship with any other supplier.

| (10) | Specifically with respect to the take-home channel, the Companies commit:






  — | to define any arrangements reserving a proportion or amount of permanent ambient-temperature shelf space in customers' outlets (hereafter: 'shelf space arrangements') separately for TCCC-branded cola CSDs, TCCC-branded orange CSDs and any other TCCC-branded CSDs, |
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(10)

Specifically with respect to the take-home channel, the Companies commit:

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to define any arrangements reserving a proportion or amount of permanent ambient-temperature shelf space in customers' outlets (hereafter: 'shelf space arrangements') separately for TCCC-branded cola CSDs, TCCC-branded orange CSDs and any other TCCC-branded CSDs,

| — | in any shelf space arrangements, not to reserve a share of permanent ambient-temperature CSD shelf space for TCCC-branded cola CSDs which would exceed the national share of CSD sales accounted for by TCCC-branded cola CSDs in the previous year minus 5 % of that share, |
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in any shelf space arrangements, not to reserve a share of permanent ambient-temperature CSD shelf space for TCCC-branded cola CSDs which would exceed the national share of CSD sales accounted for by TCCC-branded cola CSDs in the previous year minus 5 % of that share,

| — | in any shelf space arrangements, not to reserve a share of permanent ambient-temperature CSD shelf space for TCCC-branded orange CSDs which would exceed the national share of CSD sales accounted for by TCCC-branded orange CSDs in the previous year. |
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in any shelf space arrangements, not to reserve a share of permanent ambient-temperature CSD shelf space for TCCC-branded orange CSDs which would exceed the national share of CSD sales accounted for by TCCC-branded orange CSDs in the previous year.

| (11) | Specifically with respect to the on-premises channel, the Companies commit:






  — | to limit the duration of any financing agreements to a maximum of five years while giving customers the option, at three months' notice, (a) to repay any proportion of the loan payments due in cash or (b) to terminate the agreement without an early repayment penalty. Moreover, any such agreements will not be conditioned on the purchase of a specified range of TCCC-branded CSDs, |
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(11)

Specifically with respect to the on-premises channel, the Companies commit:

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to limit the duration of any financing agreements to a maximum of five years while giving customers the option, at three months' notice, (a) to repay any proportion of the loan payments due in cash or (b) to terminate the agreement without an early repayment penalty. Moreover, any such agreements will not be conditioned on the purchase of a specified range of TCCC-branded CSDs,

| — | to limit the duration of any availability agreements to a maximum of five years while giving customers, for the first time after three years, the annual option to terminate the agreement without penalty, |
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to limit the duration of any availability agreements to a maximum of five years while giving customers, for the first time after three years, the annual option to terminate the agreement without penalty,

| — | when sponsoring venues (for example sports stadia or theme parks), to require exclusivity in the venue only in respect to the sponsoring brands or flavour categories. When sponsoring events (e.g. sporting events, festivals), the Companies may impose exclusive CSD supply rights for the full range of the Companies' CSDs. |
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when sponsoring venues (for example sports stadia or theme parks), to require exclusivity in the venue only in respect to the sponsoring brands or flavour categories. When sponsoring events (e.g. sporting events, festivals), the Companies may impose exclusive CSD supply rights for the full range of the Companies' CSDs.

| (12) | Specifically with respect to commercial agreements in the on-premises channel entered into following competitive tendering, the Companies may impose exclusive beverage supply. When the tender is organised by large, private sector customers, the agreements will have a maximum duration of five years while giving customers, for the first time after three years, the annual option to terminate the agreement without penalty. The Companies will also limit the sales volume of tender agreements entered into with private customers that contain exclusive CSD supply rights to 5 % of the Companies' annual CSD sales in the on-premises channel. |
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(12)

Specifically with respect to commercial agreements in the on-premises channel entered into following competitive tendering, the Companies may impose exclusive beverage supply. When the tender is organised by large, private sector customers, the agreements will have a maximum duration of five years while giving customers, for the first time after three years, the annual option to terminate the agreement without penalty. The Companies will also limit the sales volume of tender agreements entered into with private customers that contain exclusive CSD supply rights to 5 % of the Companies' annual CSD sales in the on-premises channel.

| (13) | Specifically with respect to the placement of technical sales equipment, the Companies commit:






  — | in the case of beverage coolers, to apply the following conditions: Firstly, where the cooler is provided free on loan, the Companies may impose cooler exclusivity unless no other installed chilled beverage capacity to which the consumer has direct access is available in the outlet in which case the customer may use at least 20 % of the beverage cooler for any products of his or her choosing. Secondly, where a customer rents a cooler, he or she may, in any event, use at least 20 % of the beverage cooler for any products of his or her choosing. Thirdly, where a customer purchases a cooler, he or she is entirely free to decide how to stock it, |
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(13)

Specifically with respect to the placement of technical sales equipment, the Companies commit:

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in the case of beverage coolers, to apply the following conditions: Firstly, where the cooler is provided free on loan, the Companies may impose cooler exclusivity unless no other installed chilled beverage capacity to which the consumer has direct access is available in the outlet in which case the customer may use at least 20 % of the beverage cooler for any products of his or her choosing. Secondly, where a customer rents a cooler, he or she may, in any event, use at least 20 % of the beverage cooler for any products of his or her choosing. Thirdly, where a customer purchases a cooler, he or she is entirely free to decide how to stock it,

| — | in the case of fountain dispensers, to leave customers the freedom to place competing fountain dispensers, while limiting the maximum duration of any purchase commitment for products sold through fountain dispensers to no more than three years, with an option for the customer to terminate the purchase commitment at any time following a term not exceeding two years, |
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in the case of fountain dispensers, to leave customers the freedom to place competing fountain dispensers, while limiting the maximum duration of any purchase commitment for products sold through fountain dispensers to no more than three years, with an option for the customer to terminate the purchase commitment at any time following a term not exceeding two years,

| — | in the case of vending machines, to leave customers the freedom to place competing vending machines. |
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in the case of vending machines, to leave customers the freedom to place competing vending machines.

4.   The Commission's intention

| (14) | The Commission intends, subject to the outcome of this market test, to adopt a decision under Article 9(1) of Regulation (EC) No 1/2003 declaring those proposed commitments which meet the concerns expressed by the Commission in its preliminary assessment to be binding on the Companies. To this end, it invites interested third parties to submit their comments to it within one month of the publication of this notice. |
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(14)

The Commission intends, subject to the outcome of this market test, to adopt a decision under Article 9(1) of Regulation (EC) No 1/2003 declaring those proposed commitments which meet the concerns expressed by the Commission in its preliminary assessment to be binding on the Companies. To this end, it invites interested third parties to submit their comments to it within one month of the publication of this notice.

| (15) | Interested third parties are also asked to submit a non-confidential version of their comments, in which business secrets and other confidential passages are deleted and are if necessary replaced by a non-confidential summary or by the words ‘[business secrets]’ or ‘[confidential]’. |
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(15)

Interested third parties are also asked to submit a non-confidential version of their comments, in which business secrets and other confidential passages are deleted and are if necessary replaced by a non-confidential summary or by the words ‘[business secrets]’ or ‘[confidential]’.

| (16) | Comments should be sent to the following address, mentioning the reference ‘COMP/A.39.116/B2 — Coca-Cola’:





  European Commission |
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| Directorate-General for Competition |
| Antitrust Registry |
| B-1049 Brussels |
| Fax: (32-2) 295 01 28. |

(16)

Comments should be sent to the following address, mentioning the reference ‘COMP/A.39.116/B2 — Coca-Cola’:

European Commission

Directorate-General for Competition

Antitrust Registry

B-1049 Brussels

Fax: (32-2) 295 01 28.

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(1)  OJ L 1, 4.1.2003, p. 1.

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(2)  Based on the data currently available (data for Cyprus, Luxembourg and Malta not yet available), the commitments would be applicable to: Austria, Belgium, Denmark, Estonia, France, Germany, Greece, Hungary (only take-home channel), Italy, Latvia, Lithuania (only take-home channel), the Netherlands, Norway (only take-home channel), Poland (only take-home channel), Spain, Sweden and the United Kingdom.

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