Coca-Cola Among Firms Targeted in EU Antitrust Raids

Coca-Cola Co. was among the unnamed companies scrutinized during recent European Union antitrust raids, according to individuals familiar with the investigation, per Bloomberg. The European Commission carried out these inspections in March at companies operating within the non-alcoholic beverage sector across several member states. However, as is customary, the names of the firms involved were not disclosed

The EU’s competition regulators are investigating the possibility that certain beverage companies may have breached antitrust laws by dividing the European market to avoid competition, a practice that could lead to significant penalties. In addition to the beverage industry probe, an unidentified personal care company was also subjected to questioning by the regulators, though details remain scarce.

Sources, who requested anonymity, did not clarify whether the investigation pertains to Coca-Cola’s core business operations or its bottling partners, such as Coca-Cola HBC or Coca-Cola Europacific Partners. Coca-Cola itself declined to comment on the matter when contacted by Bloomberg, as did its bottling partners.

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The European Commission has the authority to impose substantial fines for antitrust violations, with penalties potentially reaching up to 10% of a company’s global annual revenue. However, it’s important to note that the mere occurrence of these raids does not imply guilt. The Commission has not set a legal deadline for the completion of its investigation, and such probes are often dropped if initial concerns are not substantiated.

This is not the first time Coca-Cola has been involved in an EU investigation. In 2023, the European Commission closed a preliminary inquiry into the company and its bottling partners over concerns that they were leveraging market power by offering conditional rebates to retailers, potentially undermining competition.

Similarly, a previous investigation into exclusivity and rebate agreements with customers was also concluded without any penalties, following Coca-Cola’s agreement to certain commitments aimed at addressing the EU’s concerns.

The European Commission has a history of cracking down on companies that attempt to divide the EU market to maximize profits by implementing different pricing strategies in various regions, which restricts competition. In a notable recent case, Mondelez International Inc. was fined €337.5 million ($364 million) in May 2024 for obstructing cross-border sales of its products, including chocolate, cookies, and coffee, within the EU.

Source: Bloomberg