Administrative proceeding with the company Kofola settled

30 Jul 2008

The Office for the Protection of Competition terminated on 25 July 2008 the administrative proceeding with companies from the Czech section of the Kofola group.

During the investigation initiated in November 2007, the Office proved that the companies of the given group enetered during the years 2001 to 2008 into forbidden and void vertical agreements on retail price maintenance with their customers.

The agreements were concluded with some of the wholesale customers in various regions of the Czech Republic. These customers were bound to apply unified prices in further sale. The agreements mentioned above restrained competitive relations among Kofola customers and therefore decreased consumer benefits, otherwise resulting from the unharmed competition on the market of non-alcoholic beverages. Resale price maintenance ultimately leads to price increase for consumers and restriction of competition within the market of the given brand. Therefore, the Czech and European competition law consider such behaviour to be serious breach of competition rules.

For the first time in its history, the Office used so-called settlement procedure. The result of the settlement is not only substantial decreasing of the duration of administrative proceeding, but also reduction of the fine imposed on the company Kofola Holding. The penalty imposed is 13.552 million CZK, which sum is approximately only half of the fine that would be imposed without settlement, that means without the cooperation of the company with the Office and its acknowledgement of the behaviour.

External Relations Department of the Office