Freezer exclusivity – the ECJ speaks

United Kingdom
16/10/2006
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The European Court of Justice has dismissed an appeal by Unilever against a decision of the Court of First Instance that there is a breach of EU competition law where a company supplies a retailer with a freezer cabinet on the basis that the retailer will stock the freezer only with the supplying company’s products. This case is relevant to suppliers whether or not their products are dominant.

The ECJ dismissed all of the grounds of appeal as either inadmissible or unfounded, so the position remains as set out in the CFI’s judgment. That judgment was made in November 2003 and found that the freezer exclusivity restricts competition, that no individual exemption is available and that Unilever’s subsidiary which imposed the obligation (HB) has abused its dominant position.

The CFI found that although these exclusivity clauses are a standard practice in the Irish impulse ice cream market, HB's exclusivity clause restricted competition because of the popularity of HB's ice creams and its strength on the market and because it caused retailers to act differently towards non-HB brands. The CFI found that the exclusivity was an abuse of dominant position because it prevented retailers from selling other brands and prevented competitors from gaining access to the market.

This development brings clarity for suppliers and retailers on the terms on which freezers and similar items can be provided. This development can be applied to all sorts of grocery products.

For the text of the ECJ’s order dismissing the appeal, please click here.

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