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Wednesday, July 29, 1998 Published at 17:07 GMT 18:07 UK

Business: The Company File

Wall's loses ice-cream war

Freezer cabinets: blocking access to other brands?

Birds Eye Wall's, the UK's leading ice cream maker, has been found guilty of behaving against the public interest.

The Monopolies and Mergers Commission (MMC) has upheld all but one of the complaints made against the company by the Office of Fair Trading concerning the wholesale supply of ice cream.

Cool reception

The OFT claimed in December that wholesalers who signed exclusive distribution deals with Wall's received more favourable terms than their rivals and end-of-season discounts.

The MMC found that three of the four practices they investigated were at fault. They included refusing to supply wrapped ice cream to wholesalers on equal terms to its own distributors, offering independent distributors less favourable benefits and offering discounts to retailers who bought only from Wall's own distributors.

Cheaper prices

Wall's is a subsidiary of consumer giant Unilever, which is the leading supplier of ice cream in Europe. Its brands include Solero, Magnum and Cornetto.

Unilever has been told to stop most of the anti-competitive practices from the first of March next year.

The ruling could mean lower ice cream prices and wider availability of rival brands, like those made by Mars.

Mars complains of unfair treatment

[ image: Other brands want better access]
Other brands want better access
The dispute goes back to a complaint by Mars in 1994 concerning the supply of free freezers to retailers in return for only stocking Wall's products. At that time the MMC ruled that this practice was not against the public interest. But now it has said that the wider issues should also be investigated by the Office of Fair Trading.

That issue is also being investigated by the European Union, who ruled in March against the practice of exclusive freezer cabinets in Ireland. But Unilever has appealed against that decision, blocking its immediate implementation.

New entrants like Mars and Haagen-Dazs have challenged Wall's with their super-premium brands. The 9bn ($12bn) European ice cream marked boomed last summer with the hot weather, but has cooled this year.

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