COCA COLA/CADBURY SCHWEPPES
PRESS RELEASE
PRESS RELEASE
Investigation of Coca Cola and Schweppes
The Antitrust Authority has begun an investigation into THE COCA COLA COMPANY, a United States multinational corporation, and CADBURY SCHWEPPES Plc., a company incorporated under English law. The investigation is into the acquisition in Italy by THE COCA COLA COMPANY of the Schweppes and Canada Dry marks. The acquisition formed part of a worldwide operation through which THE COCA COLA COMPANY purchased virtually all the trademarks of the beverages owned by CADBURY SCHWEPPES outside the United States, France and South Africa. The purpose of the investigation is to see whether this operation is likely to create or strengthen a dominant position on the Italian market for effervescent non-alcoholic drinks likely to substantially restrict competition on a lasting basis.
Beverages bearing the trademarks Schweppes and Canada Dry are manufactured, bottled and distributed in Italy by Acqua Minerale San Benedetto SpA under CADBURY SCHWEPPES license. In 1995, the Italian subsidiary of PepsiCo Foods and Beverages International Ltd. purchased a production facility at San Benedetto and under license manufactures, packages, distributes and markets Schweppes products in draught form.
THE COCA COLA COMPANY owns numerous beverage trade marks, including "Coca Cola", "Sprite", "Kinley", "Beverly" and "Bonacqua" which are used in Italy. The aggregate turnover from sales in Italy in 1997 was 1,368,000 million lire. THE COCA COLA COMPANY not only boasts a market share of 80% of the effervescent non-alcoholic beverages market, guaranteeing it an absolute dominance of the cola flavour, which is the largest market in terms of volume, but it also owns all the leading effervescent non-alcoholic beverage trademarks except Schweppes.
This operation would enlarge the portfolio of trademarks supplied by THE COCA COLA COMPANY, making it particularly attractive in terms of the coverage of the consumer segments and fact that these trademarks are so well-known. Firstly, having Schweppes in its portfolio of trademarks offered would enable THE COCA COLA COMPANY and its bottlers to induce wholesalers to maximize their acquisitions from them; secondly, it would certainly reduce the attractiveness to retailers of the range of products offered by its competitors which would lose the Schweppes trademark which had played an essential part in enabling them to penetrate the channel made up of bars, restaurants, pizzerias, pubs, discotheques and highly profitable clubs.
The investigation will be completed within 45 days of the starting date.
Rome, 20 April 1999