ICE CREAM WHOLESALE DISTRIBUTION (Start of full phase investigation)
PRESS RELEASE
The Italian Competition Authority has initiated a proceeding against Unilever Italia (Algida, Sorbetteria di Ranieri, Eldorado), Nestlè Italiana (Motta, Antica Gelateria del Corso), Sammontana and Gelati Sanson (Luxottica Group) as well as the parties who have undersigned an exclusive distribution agreements.
In the course of the proceeding, the Authority intends to ascertain whether the existence of exclusive distribution agreements between the main ice cream producers and the retailers could limit or restrict rival producers from accessing the distribution channels in such a way as to violate section 2 of Law no. 287/90. The proceeding originated from a complaint filed by a small ice cream and frozen pastry wholesaler, who found difficulties in managing and developing his business, in light of the particularly stringent exclusivity clause, contained in the contract undersigned by the above mentioned parties. As such, this restrictive agreement hampers the wholesaler from acquiring new market outlets for his products, as well as from maintaining commercial relationships with certain outlets.
The exclusive contractual tie could be particularly binding in light of the high penalties which are provided for if and when dealers do not comply with it. On the basis of information filed with the Authority by the complainant, it is to be noted that the above mentioned producers have initiated legal proceedings against certain dealers in order to rescind the contract and to obtain the payment of penalties. In order to ascertain the alleged anticompetitive effect of the agreement, the Authority has also to consider the commercial practice, which is ordinary in the ice cream distribution sector, consisting of supplying fridges in free loan to retailers on behalf of ice cream producers. As a result of this situation, dealers are prevented from storing rivals's products into their fridges. As such, small outlets are forced to sell only one brand.
In Italy, ice cream production amounts to 2.4 million quintals per year, for a total sales of 2,460 billion lira (1.64 billion $ approx.). The structure of supply is particularly concentrated: in fact, the first four companies cover altogether approximately 82% of the whole sector.
The investigation is to be concluded by July 31st, 1996.