Wednesday, 09 November 2022 09:52

Press Release – Imposition of a €10,342,773 fine on COCA COLA 3Ε

SubjectHCC Decision no. 762/2021 imposing a fine of EUR 10,342,773 on the company COCA COLA HELLENIC BOTTLING COMPANY S.A. (COCA COLA 3E) for infringements of articles 2 L. 3959/2011 and 102 TFEU, following an ex officio investigation of the HCC’s General Directorate for Competition as well as a complaint by the company VAP P. KOUGIOS S.A.

Summary

By its Decision no. 762/2021, the Hellenic Competition Commission (HCC) fined the company  “COCA COLA HELLENIC BOTTLING COMPANY S.A.” (hereinafter referred to as “COCA COLA 3E”) EUR 10,342,773 for infringements of articles 2 L. 3959/2011 and 102 of the Treaty on the Functioning of the European Union (TFEU) in the Greek markets for sale of cola and non-cola beverages for on-premise consumption (cold market), following the examination of  a complaint by the company “VAP PANTELIS KOUGIOS S.A.” (hereinafter referred to as VAP P. KOUGIOS S.A.) and a relevant ex officio investigation conducted by the Directorate General for Competition (hereinafter referred to as DGC).

Procedure

In June 2016, the company VAP lodged a complaint to the DGC against the company COCA-COLA 3E, concerning alleged practices aimed at competitors’ foreclosure, and in particular the complainant’s foreclosure, in the market of the island of Rhodes and the Dodecanese in general. Based on the practices described in the complaint, and in order to investigate the possibility of similar practices taking place in wider geographical areas or in relation to customers, the DGC decided to initiate in parallel a related ex officio investigation.

Following the above complaint, the DGC launched an ex officio investigation and carried out on-site inspections (dawn raids) both at the premises of COCA-COLA 3E (both at its headquarters and at its facilities in Rhodes) as well as at numerous sales outlets in Rhodes, Attica, Crete, in Patras and Thessaloniki. The DGC also sent numerous requests for information to sales outlets, competitors and wholesalers cooperating with the company COCA-COLA 3E.

The relevant Statement of Objections (SO) was communicated to the company complained of and the complainant in June 2021. The hearings before the Plenary of the HCC was held in October and November 2021.

It is noted that COCA-COLA 3E has also submitted a commitment request, which was rejected, by majority, by the HCC.

The Decision of the HCC

By its Decision no. 762/2021, the HellenicCompetition Commission (HCC), in plenary, unanimously found, following a relevant Statement of Objections, that COCA-COLA 3E, during the period 2015-2019, undertook a series of practices by concluding verbal exclusivity agreements or non meritorious exclusion of specific competitors aimed at single branding (in particular, products and/or refrigerators and/ or logos of its competitors), e.g. by issuing threats or engaging in punitive behavior in case such outlets decided to cooperate with competing suppliers as well as other practices with an equivalent effect, contrary to articles 2 of L. 3959/2011 and 102 TFEU.

Exclusivity arrangements pose a significant barrier to competitors' access to the market and deprive consumers of the possibility to cover part of their needs by competitors of the dominant undertaking, in breach of the above Articles. As a result of these anti-competitive practices, CC 3E increased its presence at the sales outletsby abusive means, namely by eliminating its competitors and preventing existing and/or new customers from accessing the markets of cola-type soft drinks and other non cola-type soft drinks for on-site consumption.

According to the HCC, COCA-COLA 3E's practices of non-meritorious exclusion of its competitors impeded the development of competition and the expansion of competitors in the specific market for several years. Combined with the verbal exclusivity agreements, these practices contributed to the formation of a "fixed hierarchy" in the specific relevant markets, limiting potential and actual competition and having negative effects for consumers, in terms of, inter alia, product quality, product variety or innovation.

In the light of these findings, the HCC decided to impose a fine of €10,342,773 on the company COCA COLA 3E, as well as a specific behavioural remedy for a period of two years from the publication of the Decision to restore conditions of effective competition in the relevant markets concerned:

When COCA-COLA 3E provides a soft drink refrigerator to a certain sales outlet under a loan-for-use agreement, and the specific outlet does not have another refrigerator or alternative cooling space suitable for placing cola-type /non cola-type soft drinks and directly accessible to consumers, COCA-COLA 3E is required to allow the sales outlet to use up to 20% of the space of the refrigerator, provided to it by the company under theloan-for-use agreement, at will.

Furthermore, the HCC ordered COCA-COLA 3E to refrain from any future violations of the above articles of L. 3959/2011 and TFEU and threatened it with a fine in case the HCC finds, with a new decision, the continuation or recurrence of the infringement.

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