HB frozen out by European Court

HB Ice Cream’s attempts to freeze out competition by barring access to company supplied in-store fridges to competitors has been blocked by the European Court of First Instance.

The court ruled that Unilever's HB Ice Cream will have to share the freezers it uses to display ice cream products in Irish stores with competitors.

The Court of First Instance ruling was a victory for the European Commission, which in 1998 held that Van den Bergh Foods company HB was taking advantage of the fact that its freezers were the only ones for ice cream bought on impulse in 40% of shops.

Irish people are the biggest consumers of wrapped products like Magnum and Cornetto bought on impulse. HB provided freezers free, on condition that the stores used them solely for HB products

“The provision by Van den Bergh Foods of freezer cabinets without charge to ice cream retailers on condition that they use them exclusively for the stocking of its ice cream is contrary to community competition law,” the Court of First Instance said.

The decision is a victory for privately held Mars, which had complained that it was unable to sell its ice creams through many outlets in Ireland. The court also found that after HB had insisted on retailers’ compliance with the exclusivity clause, the distribution of rival Mars ice creams fell from 42% to less than 20%.

HB managing director Paul Murphy said the company would examine the ruling before deciding on what action, including further litigation, it might take. The company argues that the provision and maintenance of exclusive cabinets is widespread across Europe by ice cream manufacturers.

Mr Murphy stressed that the ruling does not put retailers under any obligation to introduce competitor products into HB Ice Cream cabinets against consumer preference.