Wednesday, October 20, 2004
The Wall Street Journal, the LA Times, and the Washington Post each reported today on EU Commissioner Mario Monti's announcement of a settlement with Coca-Cola, putting an end to the five year investigation into the company's marketing practices in the European Union. The Washington Post desribed the terms of the settlement as follows:
"Under the five-year deal, Coca-Cola will scrap all rebates that require retailers to buy the same amount of its products or more each time. It also will no longer require that a customer who wants to buy best-selling regular Coke or Fanta Orange also take less-popular brands, or offer rebates if they do or reserve shelf space for them.
"It will also allow rivals to occupy 20 percent of the space inside its coolers, if its coolers are the only ones in the store."
Rumors of a settlement have been reported over the past six months or so. It will be interesting to see how the settlement will be enforced, especially after Mr. Monti leaves his post at the end of the month. Those who travel in the EU may have noticed the ubiquity of Coke products. Pepsi, which initially brought the complaint to the commission in 1999, is reported to have only about 10 % of the market.