According to the Fiscalía Nacional Económica (FNE) press release, on November 22, the TDLC approved the agreement signed between the FNE and Embotelladora Latinoamericana, Embotelladora Castel, Industrial and Comercial Lampa S.A., Sociedad Comercial Antillanca, Embotelladora Andina and Coca-Cola Embonor S.A. As a result, the trial against the latter two, principal bottling companies in Chile for The Coca Cola Company, has ended.
In the settlement, Andina and Embonor commit not to provide incentives to traditional distribution channels (grocery and liquor stores) that may inhibit the commercialization of competitors’ products. They have also agreed not to provide incentives to their own employees or managers based upon exclusion of competitors’ products.
The companies have also commit to provide 20% of their refrigeration space to competitors’ products with no more than 15% of market share, on all the stores where either the owner or the small company lack equipment suitable for both refrigeration and promotion of carbonated drinks. This agreement is effective for a time span of 5 years.
These commitments mean that consumers do not need to wait for the end of trial in order to benefit from the acts of the FNE. Consumers will have the possibility to find in all stores the carbonated drinks of their choice. This outcome benefits particularly lower income consumers, who tend to show preference for budget labels.
The above, along with the access to refrigeration in stores where it was previously impossible, should provide budget labels with a competitive push and at the same time increase the level of competition in the market.
To read the press release in Spanish, click here.