CCA closes the infringement proceeding against Coca-Cola

The Croatian Competition Agency (CCA) closed the infringement proceeding against the undertaking Coca-Cola HBC Hrvatska d.o.o. (Coca-Cola) that was opened ex-officio on the basis of the agreements entered into between Coca-Cola and its customers in the HORECA channel that contained exclusive purchasing obligations that had as their object or effect the exclusive purchasing of Coca-Cola products.

The provisions concerned contained an obligation which made the buyer purchase all his requirements in fruit juices, ice teas, energy drinks and mineral waters exclusively from the brands in Coca-Cola range of products, at the same imposing the obligation on the buyer to constantly offer the whole product assortment of Coca-Cola carbonated beverages but also all of its new products in this category of soft drinks. In turn, the buyer was entitled to an agreed incentive.

Within the same proceeding the CCA also found that Coca-Cola has also concluded contracts with other catering facilities imposing the obligation on the buyer to exclusively stock and offer to its customers the Coca-Cola products including fruit juices, ice-teas, energy drinks and mineral waters as long as the contract is in effect.

At the early stage of the proceeding Coca-Cola voluntarily committed itself to revise all the business agreements with its buyers in the HORECA channel within a four-month-period.

Concretely, given the fact that Coca-Cola holds a dominant position in the market segment of cola drinks it committed itself to conclude separate business contracts for its programme of carbonated non-alcoholic beverages separating them from the business contracts that will be separately concluded for its programme of non-carbonated non-alcoholic beverages (fruit juices, energy drinks, ice-teas, mineral water, herbal beverages) and alcoholic beverages in which it does not hold a dominant position in the market.

In respect of the above, the business contracts regulating the sale of non-carbonated non-alcoholic and alcoholic drinks can contain exclusive purchase provisions but only provided that the buyer can freely decide whether it would prefer to offer exclusively the selected Coca-Cola products, which excludes the same products of other manufacturers, or it would prefer to have a particular product of Coca-Cola brand available in its offer of a particular type of products, in which case there are no restrictions imposed on the buyer to include the equivalent products of the competing Coca-Cola brand producers in its offer.

The duration of the business agreements containing the provisions on exclusive purchase may not exceed five years. The five-year period should also include the duration of the so far concluded agreements that contain the exclusive purchase obligation.

In addition, in all the business agreements the expenditures for marketing activities will be calculated separately for every category of products whereas the provision regulating the application of the agreement on all future products will be deleted from all new agreements.

Finally, Coca-Cola committed itself to introduce a separate compliance programme and to carry out the compliance training for its employees in the area of competition rules.

The CCA published the commitments proposed by Coca-Cola on the CCA website and invited all the interested entities to submit their comments. No comments following the CCA request have been received.

The CCA accepted the commitments proposed by Coca-Cola. It found them sufficient to eliminate the competition concerns and to restore effective competition in the market.