PRACTICES RELATING TO SOFT DRINKS
LexInter | May 14, 2009 | 0 Comments

PRACTICES RELATING TO SOFT DRINKS

Decision n ° 03-D-20 of April 18, 2003
relating to practices attributable to the company Coca-Cola Beverages,
the Société des Boissons and the Société des Boissons gazeuses de la Côte d’Azur


The Competition Council, (Standing Committee),

Considering the letter dated February 14, 1994, registered under number F 658, by which the National Beverage Federation (FNB) referred the matter to the Competition Council, in application of article L.462-5 of the Commercial Code , of practices implemented by Coca-Cola Beverages (CCB SA), Société Sud-Boissons and Société des Boissons Gazeuses de la Côte d’Azur (SBGCA);

Having regard to Book IV of the Commercial Code relating to freedom of prices and competition, decree n ° 86-1309 of December 29, 1986, as amended, setting the conditions for the application of ordinance n ° 86-1243 of 1 st  December 1986 and Decree No. 2002-689 of April 30, 2002 setting the conditions for the application of Book IV of the Commercial Code;

Having regard to the observations presented by the Government Commissioner;

The rapporteur, the deputy general rapporteur and the government commissioner heard at the meeting of March 5, 2003, the FNB regularly convened;

Having regard to the other documents in the file;

Adopts the following decision:

I. – Findings

1. By letter registered on February 14, 1994 under number F 658, the National Beverage Federation (FNB) referred the Competition Council to practices implemented by the company Coca-Cola Beverages and by two independent bottlers, the Société Sud-Boissons and Société des Boissons Gazeuses de la Côte d’Azur (SBGCA).

2. The referral accused the company Coca-Cola Beverages of abusing its dominant position on the market for cola-flavored drinks by applying to its warehouse-wholesalers, since January 24, 1994, a free pricing as well as a scale. hierarchy of prices and having, on September 14, 1993, imposed on its customers to sell the 33 cl bottle of coca-cola at the same price as the 20 cl bottle, all in violation of the provisions of article L. 420-2 of the commercial code (formerly Article 8 of the Ordinance of 1 st  December 1986).

3. The company Coca-Cola Beverages, Société Sud-Boissons and SBGCA were also accused of having agreed to practice an identical pricing policy and to share the national market, in violation of article L . 420-1 of the commercial code (formerly Article 7 of the Ordinance of 1 st  December 1986).

A – THE SECTOR

a) The companies referred to in the complaint by the National Beverage Federation

4. The Coca-Cola Company is the world’s leading supplier of concentrates and syrups for the production of carbonated non-alcoholic beverages. In order to ensure the distribution of the products of its range in France, the company The Coca-Cola Company has granted to four manufacturers, the companies Coca-Cola Enterprise, SBGCA, Sud-Boissons and Socobo, an exclusive distribution of the products of the company, limited for each of them to a territorial area.

The Coca-Cola Beverages company

5. Coca-Cola Beverages (CCB SA) was established in 1989; it is a 100% subsidiary of Coca-Cola Enterprise (CCE) which brings together the bottling activities of The Coca-Cola Company (TCCC) in the United States, the Netherlands, Belgium and France and who is it -same subsidiary of TCCC at 45%. In April 1997, Coca-Cola Beverages changed its corporate name to Coca-Cola Enterprise SA (CCE SA).

6. The company CCE SA bottles and distributes exclusively drinks under the TCCC brand (” Coca-Cola “, ” Fanta “, ” Sprite ” and ” Minute Maid “) throughout the metropolitan territory, with the exception of the three licensed areas. to the three other independent bottlers namely Corsica, exclusive area of ​​Socobo, the departments of Ariège, Aude, Gers, Hautes-Pyrénées, Tarn, Tarn-et-Garonne, Pyrénées-Orientales , exclusive area for Sud-Boissons and, finally, the Alpes-Maritimes, Var and Monaco departments, exclusive area of ​​SBGCA.

7. The company CCE SA also occupies a privileged position in terms of commercial negotiations with the food circuit and the out-of-home circuit. In fact, the national large-scale distribution centers and the warehouse-wholesalers groups negotiate the commercial conditions mainly with this company.

8. The pre-eminence of CCE SA in negotiations with the out-of-home circuit and that of the food sector, as well as the alignment of Sud-Boissons and SBGCA on the conditions applied by the main bottler, contribute to a certain homogenization of prices. products belonging to The Coca-Cola Company’s portfolio.

The Sud-Beverages and Soft Drink Companies of the Côte d’Azur (SBGCA)

9. These two companies belong to the Spanish group Daurella and have common directors. They both carry out the business of bottling non-alcoholic beverages. They have both entered into a concession contract with The Coca-Cola Company and The Coca-Cola Export Corporation, which defines for each of them an exclusive area of ​​activity.

b) Coca-Cola Enterprise SA beverage distribution channels

10. The drinks sold by CCE SA, ie not only Coca-Cola in its various packaging and compositions (light, light without caffeine) but also lemon limes, carbonated drinks with orange flavor or drinks. with the taste of tea, use the distribution channels of carbonated non-alcoholic drinks (BGSA) or soft drinks, already described by the Competition Council in its opinions n ° 98-A-09 of July 29, 1998 and n ° 99-A -14 of September 28, 1999:

  • 77.1% of soft drinks are sold to the food chain for consumption by end consumers at their homes (around 10,000 points of sale);
  • 22.9% supply the so-called ” out of home ” circuit , ie cafes, hotels, restaurants (CHR) and other communities (fast food, army …) which represent 350,000 points of sale; the market for other communities is sometimes called ” third market “, because of its specificities.

11. In its decision no. 96-D-67, the Competition Council considered that the company Coca-Cola Beverages (CCB SA) held a dominant position on the national market for cola-flavored drinks. In 1996, the Coca-Cola group held 74.5% of the market for colas intended for home consumption and 89% of colas intended for consumption away from home. In a subsequent opinion n ° 98-A-09 of July 29, 1998, the Council specified that in 1998, the Coca-Cola group held 91.07% of sales of colas intended for the out-of-home circuit and 80.94% of sales of colas intended for food and that in the BGSA market other than colas intended for consumption away from home, the company had a 22% market share.

c) Warehouse wholesalers

Warehouse-wholesaler function

12. Warehouse wholesalers are responsible for the wholesale trade in beverages. As such, they act as intermediaries between producers and retail outlets in the two distribution channels described above. They perform the following logistical functions: loading and unloading of goods, storage of products, preparation of orders (allotment), transport activities, i.e. transport of goods from the place of production or storage of their goods. suppliers to their warehouses (operation called ” drawing “) and delivery of their warehouses to outlets of their customers (delivery operation).

13. Warehouse wholesalers also play an important role in the processing of returnable beverages. In addition, for the largest of them, they grant loans for the installation of drinking establishments, against the assurance of benefiting from customer exclusivity, for certain brands of beer for example.

14. Warehouse wholesalers now mainly supply the out-of-home circuit, the food circuit having largely escaped them. In fact, large-scale distribution has set up integrated networks of purchasing centers and has logistics services, warehouses and trucks assigned to the withdrawal of drinks directly from manufacturers or (and) the delivery of products from their warehouses. to their stores. Warehouse wholesalers only have a carrier activity in their dealings with supermarkets; for the latter, they generally no longer assume a trading function.

15. On the out-of-home market, according to figures communicated by Pepsi-Cola France, all drinks included, warehousekeepers-wholesalers distribute 76% of drinks (38% of which are consigned, 51% ” bag in box”). “(bib), 9% in boxes and 2% others). However, within this same circuit, warehouse-wholesalers are more and more often excluded by manufacturers who want to sell directly to the end customer and, in particular, serve the platforms of customers belonging to restaurant chains, such as Accor or Sodexho.

The product portfolio of warehouse keepers-wholesalers

16. Wholesalers initially distributed beer, then their portfolio diversified with sugary drinks and coffee. If coca-cola does not occupy a preponderant place in their beverage portfolio, it is nevertheless a strategic and essential drink, since this brand is the benchmark cola throughout the world. The share of coca-cola in the average turnover of a warehousekeeper-wholesaler represents between 4 and 6%.

17. As regards the products sold by the Coca-Cola group as a whole, from 1993 to 1997, the share of warehousekeepers-wholesalers in their distribution channels fell from 22% to 12%. This decrease is mainly due to the decrease in the share of warehouse keepers-wholesalers in the food sectors (from 10% to 1%) in favor of direct delivery (from 2 to 10%).

Organization of the profession

18. All in all, the number of warehouse wholesalers in the non-alcoholic drink market is decreasing since statistics show that 800 companies were present on the market in 1993 against 1,825 in 1980. This decline is partly linked to the movement of concentration in this sector of activity. Most of the warehouse-wholesalers have in fact been bought out by the brewers Kronenbourg and Heineken. In 1999, 70% of warehouse keepers-wholesalers were integrated and 30% independent, whereas these percentages were reversed in 1990. Warehouse-wholesalers belong to purchasing groups with which beverage producers negotiate the tariff conditions applicable at the level each year. national and make agreements on the referencing of their brands; these agreements are then extended to warehouse members. The European Beverage Center (CEB) brings together 100 independent warehousekeepers-wholesalers, that is to say not affiliated with a brewer; France Boissons brings together warehouse keepers-wholesalers affiliated with Heineken, and Elidis, those affiliated with Kronenbourg.

19. The National Beverage Federation (FNB), created in 1910, is the only trade union whose aim is to defend the professional interests of member warehousekeepers-wholesalers. It is a federation of regional unions of beverage distributors and manufacturers. In 1996, it grouped together 70% of warehouse operators-wholesalers.

B – PRACTICES

20. Until 1994, warehouse-wholesalers and purchasing centers of large food stores collected the drinks purchased from the storage places of Coca-Cola bottlers and ensured, by their own means of transport, the delivery of these drinks. products to their warehouses. These warehouse keepers and central offices paid an ex-depot tariff and took charge of the transport of goods.

21. The practice of buyer’s ” opt-out ” is customary in the beverage industry; it enables the wholesale warehouse keeper to better manage his supplies, optimize his equipment and control the organization of distribution to points of sale. It also allows competition to take place upstream, especially between wholesalers, who are encouraged to use the most economical mode and conditions of transport.

22. Until 1994, the Coca-Cola Beverages company published an ” ex-depot ” rate per 24 pallets, that is to say applicable on the production plant quay or regional ex-warehouse, for all Coca-Cola products.

  • free pricing;
  • new price lists.

a) The switch to free pricing decided by the Coca-Cola Beverages company

24. The practice of the free price consists in imposing on the customer the payment of transport, incorporated in the sale price and determined as a lump sum by the equalization of all transport charges. The award, established ” Franco ” in a national or regional level remains the same regardless of the distance between the place of bottling and place of delivery.

25. The new tariff was notified by the general management of Coca-Cola but, faced with protests from warehousekeepers-wholesalers, the latter finally retained the “ departure-deposit ” pricing , exclusively for “ bag in box ” and packaging. recorded. The company therefore added to its free rate, dated January 24, 1994, a ” returnable collection ” rate and a ” bib removal ” rate. Therefore, for all drinks belonging to the Coca-Cola product portfolio, except for ” bib“and returnable glass, transport and insurance costs are incorporated into the basic selling price. Warehouse-wholesalers can therefore always come and collect non-returnable products, if they wish, but at the free rate, the ” removal ” tariff no longer existing for them.

26. At the same time, the two Coca-Cola dealers located in the south of France have also adopted free pricing for lost packaging, maintained ex-depot rates for ” bib ” and returnable glass and changed their delivery method.

The reasons given by CCE SA

27. According to CCE SA, the modification of the pricing system was made necessary by the logistical reorganization of the storage system for Coca-Cola products. When the logistics reform was presented to FNB on September 30, 1993, the company pointed out the imperfections of the system in force at the time, consisting of 7 factories specialized by product and 9 regional warehouses. The systematic passage of Coca-Cola products from the production plant to the Coca-Cola regional warehouse was presented as a generator of additional costs, because of the handling required and the distances to be covered. Delivering customer warehouses from the Coca-Cola factory, whenever the production plan permitted, seemed preferable and cheaper. Only the free pricing system was compatible, according to the Coca-Cola company, with this direct delivery. This logistical reform should result in significant savings in transport, as well as in warehouse and inventory management (less stocks, fewer supply disruptions, fresher and more varied products), which would be shared with customers., the Coca-Cola company including in the free prices, according to its statements, only part of the transport costs. The adoption of the free system should also make it possible to lower the threshold for resale at a loss for distributors, which would encourage them to sell more Coca-Cola products.

CCE SA summarized the principles of its logistics policy, when the new tariffs applicable in 1994 were communicated, in a letter of December 8, 1993:

Two fundamental reasons are at the origin of our approach: on the one hand, the demands of a large number of customers increasingly concerned with logistics optimization, and on the other hand, the conviction within CCB SA the need to pursue a policy of rationalizing the physical distribution costs of our products. This new policy responds to this double motivation and allows substantial savings that we share with customers and consumers: cheaper products and increased efforts for market development (….). For non-returnable products, we will thus be able to achieve very significant improvements in efficiency: deliveries to customer warehouses directly from factories and reductions in repeated handling of products, reassignment of customers to the most efficient starting points to avoid current product returns, coordinated inventory management leading to improved service quality and fresher product availability. (…)

Heard by the investigators on May 22, 1998, the commercial marketing director of the company CCE SA confirmed the reasons for the tariff reform:

Since 1980, our products have experienced an explosion of our references, the development of brands and ranges. Volumes have increased by 10 to 15% per year. In 1998, we reached 1.4 billion liters sold. At the same time, our food customers have experienced a movement of concentration, a change in their logistics by reorganizing their distribution network. We had to deal with increased logistics, a concern for the quality of products with different expiry dates. Our factories were less and less provided with sufficient storage space. Faced with this massification of flows, with 90% full trucks, heavy stocks of more than 26 days, it was necessary to modify our logistics. We had to develop direct flows between our customers’ factories and warehouses. Also, this consideration of transport, (…), resulted in a new pricing, namely the franco. We met with FNB members to explain these requirements and kept the ex-deposit pricing for BIBs and returnable products which represent their largest volumes, ie 80% of their activity. We have maintained small deposits at their request. (…). From the outset, Coca-Cola enterprise SA has outsourced the transport function. Some warehouse-wholesalers have become carriers for Coca-Cola enterprise SA (…). All our products, except BIBs and consignments, are invoiced free of charge. No customer has forced Coca-Cola companies to charge departure-deposit. We have a free national rate. Indeed, we want to be the prime contractor for product flows (…). Before’ entry into force of the franc, Coca-Cola entreprises SA at the time Coca-Cola Beverages had planned a program to restructure warehouses in France. However, due to the maintenance of the departure-deposit pricing by the BIBs and consigned and at the request of the warehouse keepers, we have maintained a certain number of warehouses, the list of which we are sending you. Today, our two most important warehouses are Combs la ville and Salons, representing 93% of our volumes.” .

30. Asked about this reorganization, the president of the FNB declared on June 9, 1998: ” Regarding the warehouse restructuring plan implemented by Coca, the logistics were as follows: transport costs less than management of multiple warehouses; Coca-Cola mastering transport, logistics, deliveries and the creation of large platforms, could have control over the distribution of its products. This was the logic that motivated the Franco pricing ” .

31. The managers of Pepsi-Cola France, the main competitor of CCE SA, for their part, indicated to investigators on May 29, 1998  : ” Coca-Cola wants to process all delivery points directly. Pricing Franco is the first step; at the same time, Coca-Cola sells directly to certain customers. This strategy allows it to be more present on the market, to be closer to customers, to formulate advertising offers and point-of-sale advertising. more, it allows (him) to eliminate the presence of intermediaries which are the warehouse keepers-wholesalers who can hold competing products in their portfolio and to control the points of sale as in Belgium where there is no competition “.

32. Heard by the rapporteur on February 17, 2000, Mr. X, who was the president of Orangina at the time of the facts referred to in the referral, summed up Coca-Cola’s commercial strategy as follows: ” At the same time as the practices denounced by Orangina, namely from 1990 to 1994, Coca-Cola implemented its free pricing, which at the time represented a “ mini revolution“among beverage manufacturers; in fact, it was not customary to price drinks according to this pricing method. This free pricing, as well as the new price lists took place in the company’s overall strategy. Coca-Cola Enterprise SA, the distributor of Coca-Cola in France. (…) This aggressive and comprehensive strategy of conquering the French market cost Coca-Cola dearly, which lost around a billion francs from 1990 to 1992 inclusive (whereas the former distributor had been a constant profit before 1990) and did not regain profit until 1994“. It emerges, moreover, from the statements of Mr. X. that the strategy followed by Coca-Cola took place in two stages, the first having consisted in the direct delivery of supermarkets, and the second, in the adoption. of the free rate: “Coca-Cola initially focused on delivering food customers directly, which tends to eliminate EGs from the food network by adopting free pricing. The Coca-Cola company does not realize any margins on the franc; the prices are attractive for supermarkets. Warehouse wholesalers have gone bankrupt, such as Spad. Since then, supermarkets have formed purchasing platforms; it is their own strategy; the result is that EGs have practically disappeared from the food industry; This disappearance is therefore the combined result of Coca-Cola’s strategy and the strategy of supermarkets; it is difficult to assess the impact of each of them, taken in isolation. Orangina and Pepsi have also adopted the free pricing system for food in 1996, following Coca-Cola and under pressure from supermarkets. You ask me why Orangina and Pepsi have not also adopted the free pricing for CHDs, unlike Coca-Cola. This is because these two companies do not want to deliver directly to CHD points of sale, while Coca-Cola has adopted a strategy of direct delivery of its products also to CHD points of delivery. In Asian and African countries, Coca-Cola delivers directly to CHD points of sale. In Europe, this is not the case to my knowledge, with the exception of France and Spain unlike Coca-Cola. This is because these two companies do not want to deliver directly to CHD points of sale, while Coca-Cola has adopted a strategy of direct delivery of its products also to CHD points of delivery. In Asian and African countries, Coca-Cola delivers directly to CHD points of sale. In Europe, this is not the case to my knowledge, with the exception of France and Spain unlike Coca-Cola. This is because these two companies do not want to deliver directly to CHD points of sale, while Coca-Cola has adopted a strategy of direct delivery of its products also to CHD points of delivery. In Asian and African countries, Coca-Cola delivers directly to CHD points of sale. In Europe, to my knowledge, this is not the case, with the exception of France and Spain“.

33. Finally, the president of the company Bertrand, warehousekeeper-wholesaler subsidiary of Heineken, declared, during his hearing by the rapporteur, on February 29, 2000: ” EGs were forced out of the food market. to the strategy of supermarkets in the food sector who wish to buy directly from manufacturers without going through intermediaries. This allows them to lower the threshold for resale at a loss. EGs also inevitably risk being squeezed out of the third market. not specifically Coca-Cola’s pricing policy, but the natural evolution of the market. Large catering groups, such as Sodexho or Helior (Bercy Management), wish to buy directly from manufacturers. More and more, CHR are going to buy from companies‘Cash and carry’ , subsidiaries of the major food companies “.

34. With regard to supermarkets, the representative of the company Pepsi-Cola France indicated, during a hearing on June 8, 1998: ” The pricing has been free pricing since 1996; before that date, we were invoicing departure-depot. . The GSA asked Pepsi for a free price. We adopt a single free price thanks to the establishment of our production sites (with a distance of 350 km on average) “.

35. It should be noted that the restructuring that took place from 1993 to 1997 did entail a reorganization of logistics, in particular the closure of three Coca-Cola warehouses, two of which are small, and the refocusing of flows on Combs and Salons to the detriment of those from Lille, Rennes, Bordeaux, Lyon and Luneville. In addition, there are three production sites for Coca-Cola products: Clamart, Grigny and Marseille (Les Pennes Mirabeau).

36. An appraisal, carried out by the HBC firm at the request of the FNB and produced in support of the referral, estimates the loss suffered by warehouse keepers-wholesalers at 190,000 pallets per year, or 11 million francs. It emerges, however, on the one hand, from the details provided to the investigator of the DGCCRF by the president and the director of the FNB, that warehouse-wholesalers made 90% of their sales in the CHR sector, on the other part, from the elements communicated by the managing director of Pepsi-Cola France, that the ” bag in box ” and the consigned, which escape the application of the free tariff, represented respectively 51% and 38% of the sales realized by the warehouse keepers. wholesalers in the aforementioned sector.

37. In addition, with regard to the possible impact of the free price on the wholesale price of drinks, the rapporteur invited the director of the FNB to distribute a questionnaire drawn up by him to his warehouse-wholesale members. The examination of the 75 responses sent by the FNB on February 13, 2002 (including the response from Elidis, which brings together the warehouse keepers-wholesalers affiliated to Kronenbourg) shows that to the question ” the adoption of the free pricing, in 1994 , has it led to an increase in wholesale prices? ? “, the response was mostly negative (26 negative responses against 16 positive responses; the section was not provided in the other responses). 21 warehouse keepers-wholesalers believe that the free pricing had no impact on their figure. business since 1994, while only 4 believe the impact has been negative (the others do not answer the question).

38. As a result of this pricing innovation, a certain number of warehouse wholesalers have benefited from transport contracts with Coca-Cola; the drinks were billed to them at the free rate but they were paid for the transport of the products they themselves came to withdraw from the Coca-Cola warehouses on the basis of specific contracts.

39. Thus, the manager of the Tafanel company declared, during her hearing by the rapporteur, on 3 March 2000: “The elimination of take-in activities for lost packaging of Coca-Cola products could have resulted in the technical unemployment of my semi-trailer drivers, especially since only Coca-Cola products required the take-in activity, with Cristalline brand waters. The other drinks come to us by SNCF and therefore do not require a re-entry activity. In reality, this did not happen, because Coca-Cola issued us a carrier license. When we buy non-returnable merchandise from Coca-Cola, we pay the free price. We collect the goods ourselves from the factories or warehouses of Coca-Cola and we invoice the price of transport to Coca-Cola, on the basis of scales established by Coca-Cola.” .

b) The new price lists

40. Before the application of the new free tariff, warehousekeepers-wholesalers were subject to a single tariff, based on the price of Coca-Cola drinks per 24 pallets. This rate was therefore a wholesale rate, given the importance of the quantities to be ordered.

41. The new free pricing is quite different. It provides for a hierarchy of prices according to a new segmentation of 1 to 24 pallets.

42. The following table, which concerns lost packaging (in francs, excluding tax), makes it possible to compare the new free pricing of 1994 with the ex-depot rate of 1993:

1.5 l PET 6.63 7.37 6.23 6.22 6.21 6.16
PET 1.5 l
per 6
39.78 44.22 37.38 37.32 37.26 36.96
PET 2 l 8.52 9.56 8.10 8.09 8.05 7.98
33 cl box 2.11 2.3 1.93 1.93 1.92 1.91
33 cl box
by 6
12.66 13.8 11.58 11.58 11.52 11.46
Pack 8
per 25 cl
19.83 23.11 19.41 19.39 19.35 19.28
Pack 12
per 25 cl
29.38 34.14 28.70 28.66 28.60 28.48
Individual
50 cl
4.37 5 4.20 4.19 4.18 4.17
Pack 4
of 50
17.48 20 16.80 16.76 16.72 16.68
  • small quantities, from 1 to 5 pallets;
  • large quantities, from 6 pallets (up to the optimized truck).

This principle is the same for all the products in the range of the Coca-Cola company.

44. With regard to returnable products, customers have the choice between an ex-depot tariff comprising two tariff categories (less than five pallets and more than five pallets) and a free-of-charge tariff with little hierarchy. It is advisable to indicate the identity of the prices of the returnable 20 cl and the returnable 33 cl. With regard to ” bag in box “, wholesalers have the choice between a pick-up price without hierarchy and a free-of-charge rate with little hierarchy.

c) Price imposed for the 33 cl bottle

45. On September 14, 1993, the Coca-Cola Beverages company sent a letter to all its customers informing them of the conditions for launching the 33 cl returnable Coca-Cola bottle. In this same document, CCB SA asked its warehouse-wholesale customers ” to apply the same sale price for Coca-Cola IVC 20 cl and Coca-Cola IVC 33 cl “. CCB SA also indicated: ” On our side, our sales forces will ask the CHR to practice a consumer selling price identical to the current Coca-Cola 20 cl. This is in line with our” CHR Traffic “promotion policy that we conducted this year “.

46. CWB SA also sent a circular to the cafes, accompanied by a prospectus in which the company announces for a national launch in the 1 st  half of 1994: ” Coca-Cola 33 cl, and the price of the bottle 20 cl, because your customers always want more “. In addition, the pre-printed labels of the 33 cl bottles included the words: ” 33 cl at the price of the 20 cl bottle “.

47. On the basis of the above findings, the rapporteur has drawn up a proposal for dismissal.

II – Discussion

48. Under the terms of Article L. 464-6 of the Commercial Code, ” When no practice liable to undermine competition on the market has been established, the Competition Council may decide, after the The author of the referral and the Government Commissioner were able to consult the file and make their observations, that there is no need to continue the procedure “.

On the position of Coca-Cola Enterprise SA

49. As noted in paragraph 11, the Competition Council considered, in decision n ° 96-D-67 of 29 October 1996, that the company Coca-Cola Enterprise SA, then called Coca-Cola Beverages, was in a dominant position on the national market for cola-flavored drinks. Such a position was confirmed by the figures collected in the context of opinion n ° 98-A-09 of July 29, 1998. Nothing in the file shows that this position would have been modified since this period and, therefore, Coca-Cola Enterprise SA should be considered to have a dominant position on the national market for cola-flavored drinks.

On the practice of the free price

50. The FNB maintains in its referral that the introduction of a free price constituted an abuse of the dominant position of the company Coca-Cola Enterprise SA.

51. It should be recalled, first of all, in this regard, that the practice of the free price is not in itself anti-competitive and is prohibited, under competition law, only if it constitutes the support for an anti-competitive agreement or an abuse of a dominant position. Thus, the Court of Justice of the European Communities, in a judgment of 3 October 1985 SA Belgian Center for Market Studies – Telemarketing (BEM) v SA Compagnie luxembourgeoise de télédiffusion (CLT) and SA Information Publicité Bénélux (IPB) – no. 311/84, stated that “An abuse within the meaning of Article 86 (c) of the Treaty is the fact, for an undertaking holding a dominant position on a given market, of reserving or reserving to an undertaking belonging to the same group, and without objective necessity, a ancillary activity which could be carried out by a third-party undertaking as part of its activities on a neighboring but distinct market, at the risk of eliminating all competition from that undertaking . “Pursuant to these same principles, the European Commission, in a decision of July 18, 1988 IV / 30.170 Napier Brown-British Sugar, considered that the refusal by a company to “constitute an abuse of a dominant position”leave its customers the choice between an ex-factory price and a delivered price, while reserving the exclusivity of the auxiliary activity of the transport of sugar to destination, and thus eliminating any competition on the delivery of the products “( point 69). Under national law, the Competition Commission, in an opinion of 18 September 1981 on concerted practices between groups of companies exploiting mineral water sources, holds, in a more nuanced manner, ” that the adoption of free pricing may be either favorable or unfavorable to the exercise of competition in the economic sector in which it operates; that the impact of such a pricing method depends largely on the circumstances and the manner in which it is adopted “.

On the object of the practice of the free price

52. The FNB maintains, on this point, that by replacing the warehouse keepers-wholesalers, who carried out the function of transporting the drinks in its range for the product withdrawal phase, the company Coca-Cola Enterprise SA was, in reality, aiming , to eliminate warehouse-wholesalers from the Coca-Cola product delivery circuit.

53. As the Council has frequently recalled, in particular in a decision of 21 November 1989 (n ° 89-D-39 – Kenner Parker Tonka France), ” a supplier is free to modify the organization of his distribution network , without its customers benefiting from an acquired right to maintain their positions “.

54. In the present case, it is apparent from the elements noted in paragraphs 27 to 30 that the objective pursued by CCE SA when adopting the free pricing lay in supporting its policy of direct sales to its large customers, as well as in its logistical reorganization. Indeed, the terms of the letter of 8 December 1993, sent by the Coca-Cola company to its customers (above, paragraph 28) show that the aim sought by the contested reorganization was the achievement of ” substantial savings ” to be shared with customers and consumers as well as the implementation of improvements in terms of efficiency, in particular by reducing handling and coordinated inventory management.

55. The lack of anti-competitive nature of the aim pursued by CCB SA is, moreover, confirmed by the statements both of the President of the National Beverage Federation, mentioned in paragraph 30, and of the representatives of the companies Pepsi-Cola France and Orangina , cited in paragraphs 31 and 32, according to which the economic interest of the introduction of the free price allowed the Coca-Cola company not only to have more direct contact with its customers, but also to reduce its distribution costs .

56. Finally, in addition to these motivations, the adoption of free pricing and the direct delivery policy appear to be one of the consequences of the strategy of supermarkets, as is apparent from the declarations of the president of the Bertrand company, mentioned in paragraph 33, and according to which large food stores wanted to reduce their intermediate costs and obtain supplies directly from manufacturers, a strategy also adopted by large collective catering groups.

57. It has therefore not been established that the introduction by CCB SA of the free price would have had an anti-competitive object.

On the effect of the practice

58. The FNB also claims that the practices would have had considerable effects and would have contributed to the disappearance of warehouse keepers, who are now reduced to the role of service provider. It adds that in the long term, the disappearance of these intermediaries will harm the interests of Coca-Cola’s competitors, who need their distribution channels to sell their drinks.

59. On this point, it should first of all be recalled that the fact that a change in a manufacturer’s commercial policy generates a loss of profit for its distributors is not sufficient to establish the existence of a practice anti-competitive.

60. The Council notes, moreover, that in this case, the warehousekeepers-wholesalers were able to continue to withdraw the ” bag in box ” and the returnable bottles at the removal rate when these products represented the most significant part of their sales. Indeed, according to the data provided by the company Pepsi-Cola set out in point 36 and not contested by the FNB, the warehouse keepers-wholesalers made, at the material time, 90% of their sales in the hospitality sector where the consignments and “ bag in box ” represented 38% and 51% respectively.

61. Thus, while it must be admitted that the adoption of the free pricing had an impact on the financial situation of warehousekeepers-wholesalers, it has not however been shown that this measure was solely responsible for the difficulties of the profession. nor of the disappearance of certain warehouse-wholesalers, this development having in fact started before 1993, as the data set out in paragraph 18 demonstrate.

62. According to what the FNB also maintains, a certain number of warehouse operators / wholesalers obtained compensation from Coca-Cola in the form of transport contracts, which constituted abusive discriminatory practices.

63. The investigation confirmed that a certain number of warehouse operators-wholesalers had benefited from transport contracts with the company CCB SA (above, paragraphs 38 and 39), under which the wholesalers were paid for the transport of products that they themselves came to collect from Coca-Cola warehouses. However, the file does not contain any evidence to suggest that the benefit of this system of payment for transport services was refused in a discriminatory manner to warehouse keepers-wholesalers who requested it. No anti-competitive practice has therefore been established in this regard.

64. As regards, finally, the alleged impact of the practice of the free price on the wholesale prices of drinks, it appears from the responses to the questionnaires sent to the warehouse keepers-wholesalers and referred to in paragraph 37 that, according to the latter, l he adoption of free pricing did not lead to an increase in wholesale prices, which, moreover, nothing in the file reveals the existence.

On the establishment of a hierarchical price scale

65. The FNB maintains that the new prices introduced by CCB SA, on the one hand, reflect the latter’s desire to take direct delivery to food retail customers while strengthening its control over the distribution of the product at the stadium. retail, on the other hand, do not leave a sufficient margin for warehousekeepers-wholesalers to allow them to continue to supply some of their customers, so that it will be impossible for them to compete with the direct sales of Coca-Cola, which is doing so. monopolize their customers.

66. The investigation did not, however, add any element which might suggest that the new pricing adopted in 1994 would have had an anti-competitive object, effect or potential. Thus, the president of the company Bertrand, warehouse-wholesaler subsidiary of Heineken, declared, during his hearing by the rapporteur, on February 29, 2000: “Regarding the new tariff schedule which establishes a threshold of 6 pallets, I think it had, at the time, met the expectations of small warehouse keepers-wholesalers, anxious to prevent retailers from buying directly from Coca-Cola. Cola Beverages. The FNB’s fear that the scale would encourage average customers to buy directly from Coca-Cola does not seem to me to be well founded; indeed, which customer will buy 6 pallets? certainly not a retail business; you need a very large storage area for that “.

67. It should, moreover, be pointed out that that scale is not indicative of Coca-Cola’s commercial policy, in so far as it does not take into account the discounts granted by Coca-Cola to its customers. After integrating these discounts, the wholesale price of Coca-Cola items can thus deviate significantly from the scale.

68. It has therefore not been established that the practice in question constitutes an abuse of a dominant position prohibited by Article L. 420-2 of the Commercial Code.

On the taxation of the price of the 33 cl bottle

69. Based on the terms of the circular of 14 September 1993 sent by CCB SA to its customers (above, paragraph 45), the FNB deduces from this that the supplier imposed a sale price of the 33 cl bottle equal to at the selling price of the 20 cl bottle.

70. It follows from the elements noted in paragraphs 45 and 46 that the Coca-Cola company, when launching the 33 cl bottle, asked the warehouse-wholesalers and the CHR to apply the same sale price for this bottle as for that of 25 cl.

71. However, in addition to the fact that no price was quantified in the documents produced in the file, the Council notes that demand tended to lower prices since it recommended aligning the price of a larger volume with that of of a lower volume. Furthermore, nothing in the file shows that the circular in question was actually applied by the distributors or that the Coca-Cola company checked its possible application or implemented a price policy.

On the existence of an agreement between the bottlers CCE SA, Sud-Boissons and SBGCA

72. The Council notes, on this point, that the companies in question carry out their activity in distinct areas defined by the distribution contracts concluded with The Coca-Cola Company; they are therefore not in a competitive situation. Consequently, even if these undertakings had agreed to ” practice an identical pricing policy “, such a practice could not, for lack of object and anti-competitive effect, be classified as a cartel on the basis of Article L. 420-1 of the Commercial Code.

73. It follows, in conclusion, from all of the foregoing that no practice liable to adversely affect competition has been established in the present case and it is therefore appropriate to apply the provisions of Article L. 464-6 of the aforementioned Commercial Code.

DECISION

Sole article: There is no need to continue the procedure.

Deliberation on the report of Mrs. Luc, by Mrs. Pasturel, vice-president, chairing the meeting, Mr. Nasse, vice-president and Mr. Flichy, member, replacing Mr. Jenny, vice-president prevented.

The meeting secretary, The Vice-President, chairing the meeting,
Thierry poncelet Micheline Pasturel

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