Coca-Cola settles case with the EU

The EU reached a settlement today of its long-running antitrust case against Coca-Cola under which the world’s biggest soft drinks company agreed to change sales practices that helped it win roughly half of the market in Europe.

Competition Commissioner Mario Monti said that commitments presented personally by Coca-Cola chief executive Neville Isdell in Brussels were “sufficient for a settlement decision, which will close a five-year probe.”

The changes include an end to exclusivity arrangements with stores or restaurants and allowing rival drinks into Coke-branded coolers, Monti said.

The aim is to let consumers to choose what to buy “on the basis of price and personal preferences, rather than pick up a Coca-Cola product because it’s the only one on offer.”

The deal allows Coke to avoid a fine and potentially years of continued legal wrangling.

It will probably take effect next spring, after being translated and published in the EU’s official journal for a consultation period.

The so-called settlement decision, a new tool in the EU’s antitrust arsenal, makes the commitments the company agrees to legally binding and enforceable in national courts. A fine could be imposed later if Coke breached the terms.

The case was sparked by a complaint from drinks rival Pepsi in the 1990s that Coke’s distribution deals in Europe unfairly restricted access for competing products to store shelves and coolers.

Coke has roughly half the European market, compared with about 10% for Pepsi. In the US, Coke’s lead over Pepsi is smaller.

Under the deal, Coke will scrap all rebates that require retailers to buy the same amount of Coke products or more each time. It also will no longer require that a customer who wants to buy best-selling regular Coke or Fanta Orange also take less-popular brands, or offer rebates if they do or reserve shelf space for them.

It also will allow rivals to occupy 20% of the space inside its coolers, if its coolers are the only ones in the store.