Coke, EU strike deal to end 5-year antitrust probe

Coca-Cola has reached an agreement with the European Commission today to settle a five-year antitrust case that accused the world…

Coca-Cola has reached an agreement with the European Commission today to settle a five-year antitrust case that accused the world's biggest soft drinks maker of unfairly shutting out competitors.

European Union investigators had probed whether Coke abused its dominance in the cola market to strengthen its hand in other soft drinks sectors.

In contrast to the United States, Coke enjoys a huge dominance over Pepsi in Europe.

The Commission accused Coca-Cola and its European bottlers of offering retailers incentives to give Coke products prominent shelf space, thus blocking attempts by other companies to get a toehold in the market.

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"Consumers will generally have more choice at cafes, pubs and shops and will therefore be in a position to choose on the basis of price and personal preferences rather than pick up a Coca-Coca product because it's the only one on offer," Competition Commissioner Mr Mario Monti told a news conference.

"The nature of the industry, the complexity of the issues and the great number of territories under investigation is probably unprecedented," he said.

The probe had spanned most of Monti's tenure as competition commissioner.

Coca-Cola agreed to end exclusive agreements with the companies it supplies and stop offering rebates to customers who improve their sales.

Instead, rebates will reflect current sales without comparisons against the past. The US drinks giant also committed itself to end an arrangement requiring stores buying its best-selling Coke and Fanta drinks to also buy less-popular drinks such as Vanilla Coke.

But Coke and others can still offer inducements to stores to place their products next to each other.

Retailers will be free to use one-fifth of the space in Coca-Cola-branded refrigerators to stock whatever they like, including anything from milk to Pepsi.

Coke may finance small cafes and other outlets as in the past as an alternative to bank loans, but with new limits.

Coke faces fines if it breaks the commitments. Its share price was up 16 cents at $39.40 in late afternoon trading on the New York Stock Exchange.