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Nestle, Unilever May Face Italy Antitrust Action

Source: Reuters
25/07/2007

Zurich/Rome, July 25 - European food companies Nestle and Unilever may face new antitrust action in Italy in a long-running dispute over ice cream marketing, a lawyer for U.S. rival Mars Inc. said on Wednesday.

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A recent court ruling cleared the way for competition authorities to revisit the case on the grounds that Nestle, Unilever and several Italian companies had broken antitrust guidelines by preventing retailers from putting rival brands in their freezers, said Filippo Satta, a Rome-based lawyer who represented Mars.

Privately owned Mars may use the ruling by Italy's highest administrative court earlier this month to relaunch an antitrust case against them, Satta said.

A spokeswoman for the antitrust body said, however, the ruling would not necessarily force a reopening of the case, leaving all involved to wait for the court to publish the reasoning for its decision, probably in September.

The published reasoning is expected to reveal why the court overturned a lower court ruling that had favoured Nestle and Unilever and to provide clearer guidance on how the companies and the regulator should proceed.

"If they go by the book, the (competition) authority should proceed with the case automatically. If they do not, then Mars can decide to relaunch the case. We need to wait for the court reasoning," Satta said.

Unilever and Nestle also both said they awaited the full text of the decision.

Nestle spokesman Francois Perroud said Nestle did not expect the ruling would affect its Italian operations, because only sellers with a market share of over 30 percent would be required to open their freezer space to rivals.

"We felt that if a company has made an investment to buy the deep freezer, there is no reason why a competitor should have access to it," he said.

The case recalls similar action in Ireland last year after the European Court of Justice ruled that Unilever could not block retailers from stocking rival brands in storefront freezers that Unilever had provided to showcase its products.

That decision was expected to pave the way for more intense competition for so-called impulse ice cream, or individual servings sold in kiosks, service stations and storefronts.

A spokesman for Unilever declined to comment until the court publishes its reasoning. Mars was not immediately available to comment.



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