Coca-Cola premises raided

LONDON, JULY 24: Coca-Cola premises across Europe have been raided by European Commission inspectors investigating the company's trading ...

LONDON, JULY 24: Coca-Cola premises across Europe have been raided by European Commission inspectors investigating the company8217;s trading practices. The raids are part of an operation to establish whether the world8217;s top brand name has abused its market position in Germany, Austria and Denmark by offering incentives to retailers to carry its full range of products, to sell more of them and to stop selling competing brands.

Coca-Cola8217;s UK headquarters in Hammersmith, west London, were also visited.The European Competition Commissioner, Karel Van Miert, said bonuses offered by companies were quot;simply not on. He said quot;let me make it quite clear that a dominant company cannot indirectly bully competitors by pushing its customers to buy less of the competitors8217; products.quot; The EC says the agreement with Coca-Cola in 1997, through which the American firm gained clearance from the EU for its UK licensing deal with Cadbury-Schweppes, amounted to an implicit recognition that such practices were illegal. A spokesmanfor Coca-Cola confirmed that Commission officials had carried out dawn raids at plants and premises in Germany, Austria and Denmark over the past two days, in which records were confiscated. Commission officials also visited the offices of four bottling companies in the same countries.

Coca-Cola holds stakes in the companies but does not own them outright. quot;We can confirm that the European Commission made unannounced visits to several of our offices and the offices of some of our bottling partners,quot; the spokesman said. quot;Their purpose was to review internal files related to commercial practices with retailers and other customers. We believe we are within full compliance of all competition laws and regulations, and we are co-operating fully with the authorities.quot;

A spokesman for Coca-Cola UK said he understood the raids were carried out after the Commission quot;received information suggesting there had been a violationquot; of trading practices. The investigation comes a month after Coca-Cola products were atthe centre of a European health scare. The Belgian government imposed a nationwide ban on soft drinks produced by the firm when dozens of youngsters were hospitalised complaining of stomach pains and nausea after drinking Coke. The ban was dropped at the beginning of this month. But the scare rapidly spread to other countries, with Luxembourg imposing a similar ban, France banning Coke in cans, and the Netherlands, Spain, Germany and Switzerland recalling Coca-Cola products sourced from Belgium. Coca-Cola said it had traced the origin of the problems in Belgium to a plant in Antwerp and another in Dunkirk, France. The bans were a major blow to the US giant, which admitted European consumer confidence in its brands had suffered badly.