The EU Commission has opened a formal antitrust investigation into whether energy drinks company Red Bull illegally restricted competition in the energy drinks sector in breach of EU competition rules.
The investigation focuses on whether Red Bull influenced retailers to disadvantage or stop selling rival energy drinks, particularly in the Netherlands.
Specifically, the Commission says it has indications that Red Bull, manufacturer of the well-known 250ml Red Bull energy drink, may have developed a European Economic Area (EEA)-wide strategy to restrict competition from energy drinks larger than 250ml, as regards sales in the ‘off-trade’ channel, i.e. sale points where the drinks are purchased for consumption elsewhere, like supermarkets and petrol station shops. Red Bull’s strategy allegedly targeted in particular the energy drinks sold by its closest competitor.
The Commission says its concern is that Red Bull may have implemented such strategy at least in the Netherlands, where that company appears to hold a dominant position on the national market for the wholesale supply of branded energy drinks, by engaging in two suspected anticompetitive practices: (i) granting monetary and non-monetary incentives to its off-trade customers to stop selling (‘delist’) or disadvantage, for example, in terms of visibility, competing energy drinks sold in sizes exceeding 250ml; and (ii) misusing its position as category manager at off-trade customers so that competing energy drinks sold in sizes exceeding 250ml are delisted or disadvantaged.
Under category management arrangements, shops, such as supermarkets, entrust the marketing of a category of products, such as energy drinks, to a specific supplier (the ‘category captain’ or ‘category manager’). Acting as category manager may cover not only the supplier’s products, but also the competitors’ products. The category manager may thus have an influence on, for instance, the selection (the assortment), the placement, and the promotion of competing products for a shop.
This is the Commission’s first formal investigation into a potential abuse relating to the misuse of a category management position by a supplier to limit or disadvantage competing products.
If proven, the practices under investigation may breach EU competition rules that prohibit the abuse of a dominant position.
While the Commission will now carry out its investigation as a matter of priority, it stresses that the opening of a formal investigation does not prejudge its outcome.
More information on the investigation will be available on the Commission’s competition website, in the public case register under the case number AT.40819.
