Unilever faces UK ice cream inquiry

 

Britain's Monopolies and Mergers Commission (MMC) is to investigate the country's ice cream market for the third time in six years. The move is because of concerns over the dominant position of Unilever, the Anglo-Dutch consumer products group.

Birds Eye Wall's, the frozen food division of Unilever, has almost 70 per cent of sales, with a range of products including Magnum, Solero, Cornetto and Calippo.

It has a dedicated distribution network and has supplied shops with almost 70,000 freezer cabinets exclusively for its products. Competitors say this excludes them, particularly in small shops with room for only one cabinet.

Ordering the inquiry yesterday, Mr John Bridgeman, director-general of fair trading, said there were "continuing problems with competition in the supply of impulse (bought) ice cream". He added that the market had not developed as anticipated when the MMC gave freezer exclusivity a "clean bill of health" in 1994.

Birds Eye Wall's said it was disappointed and saw little point in another inquiry. "Wall's has achieved its position in the ice cream market through innovation, market forces and fair competition," said Mr Iain Ferguson, chairman.

But Mars, the US confectionery group, which has been campaigning for a full inquiry since 1993, welcomed the referral.

It said products such as Mars and Snickers ice cream bars outsold Wall's in grocery multiples where they were usually sold on equal terms.

Freezer exclusivity has been under attack elsewhere in the EU. In March, the European Commission ruled that Unilever's Irish subsidiary had abused its dominant position by excluding rivals' products from its cabinets. Unilever, the world's biggest maker of ice cream, is appealing against the ruling to the European Court.