EC unlocks ice cream wrangle

By our EC correspondent Ice cream advertising is poised for meltdown this summer after an historic conclusion to the four year-long freezer cabinet dispute between Unilever and Mars.

By our EC correspondent

Ice cream advertising is poised for meltdown this summer after an historic conclusion to the four year-long freezer cabinet dispute between Unilever and Mars.

Last Friday, the European Commission reversed its decision to condemn Unilever’s “anti-competitive” ice cream distribution in Ireland in return for massive concessions by the market leader. Unilever has agreed to abandon its “inclusive pricing” strategy throughout Europe.

Until now, sellers in most of Europe have paid for the cost of freezer cabinets in the price of the ice creams, whether or not they have a Unilever freezer.

In Ireland, the impact on Unilever will be threefold. In addition to scrapping inclusive pricing, it has agreed to sell 15 per cent of its freezers there this year. It will also give all retailers in Ireland the option to buy its freezers through a hire-purchase scheme over the next five years.

In return, the EC – led by competition commissioner Karel van Miert – has agreed to recognise the principle of freezer cabinet exclusivity that Unilever has fought hard to uphold, meaning freezers still owned by Unilever are allowed to exclude brands owned by other producers.

Both Unilever and Mars, which complained to the EC in September 1991, are claiming victory. “We’re delighted the EC has recognised the principle of cabinet exclusivity,” says Unilever senior ice cream marketing executive Chris Pomfret.

“It’s great news. We look forward to Bird’s Eye Wall’s (Unilever’s UK subsidiary) taking similar action in the UK to that adopted by HB Ice Cream (the Irish equivalent),” says Mars Confectionery managing director in the UK Simon Bullimore.

Pomfret hinted that the hire-purchase scheme would soon be offered to UK retailers. “We are looking at it. After all, our business is ice cream, not freezer cabinets,” he says.

* NestléLyons Maid, formerly NestléIce Cream, is bringing out a new range of smaller freezer units designed to stock its top six brands. The freezers are designed to fit alongside larger Wall’s freezers in spaces too small for NLM’s other freezers. Retailers taking the freezers will be obliged to use them solely for NLM products. The company is bringing out a number of new products in the next few weeks including an ice cream version of Aero, a cone called Extreme and a lolly shaped like Donald Duck.

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