Competition Authority Notification No: CA/768/92E: J. Donohue Ltd/Bubble Up International Ltd (The Monarch Company)

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COMPETITION AUTHORITY

Decision no. 552

Competition Authority Decision of 27 May 1999 relating to a proceeding under Section 4 of the Competition Act, 1991

Notification no. CA1768/92E - J Donohoe Ltd/Bubble Up International Ltd (The Monarch Company)

Abstract:

Notification under section 4 of Competition Act 1991 – Exclusive bottling and distribution agreement – Bubble Up had given exclusive licence and right J. Donohue Ltd to manufacture, bottle and distribute Bubble Up beverages in specified counties – Lemon-lime beverage – Bubble-Up trademark – Market share – Likely impact on competition – Agreement between potential competitors.

The market shares were small and the likely impact on competition was negligible. Although the agreement was an agreement between potential competitors the products in question were exposed to significant competition in the relevant market. The agreement did not restrict or distort competition in the relevant market. The Competition Authority so decided in saying that the agreement did not contravene section 4(1) of the Competition Act 1991.

Introduction

1 Notification was made by J Donohoe Ltd on 30th September 1992 with a request for a certificate under Section 4(4) of the Competition Act, 1991 or, in the event of a refusal by the Competition Authority to grant a certificate, a licence under Section 4(2) in respect of an exclusive bottling and distribution agreement.

1. (a) The Subject of the Notification

   2. The Notification is an exclusive bottling and distribution agreement where Bubble Up International Ltd. have given exclusive licence and right to J Donohoe Ltd to manufacture bottle and distribute Bubble-Up beverages in the counties of Carlow, Wexford, Waterford, Kildare and Wicklow.

2. (b) The Parties Involved

   3. J Donohoe Ltd is the parent company in a group of companies, several of which also distribute drinks products in the geographic area affected by the arrangements. Other companies in the group are involved in other trades (motor sales, computer services) and are unaffected by these arrangements.

   4. The subsidiary companies also involved in the drinks trade are:

   Patrick Keily & Sons (1957) Ltd,Waterford	100% owned	Wholesale Drinks distributor
   Thomas Power & Co. Ltd, Dungarvan, Co. Waterford	100% owned	Wholesale Drinks distributor
   Mr J Keane & Co. Ltd, Dungarvan, Co. Waterford	100% owned	Wholesale Drinks distributor
   South East Beer Sales Ltd, Enniscorthy, Co. Wexford	100% owned	Wholesale Drinks distributor

   5. The Monarch Company Inc. of Atlanta, Georgia, U.S.A. is the parent company of Bubble Up International Inc., a corporation of the State of Illinois, USA.

3. (c) The Products and the Markets

   6. The notifying party submitted that the goods affected by the arrangements are various packaged soft drinks in the lemon-lime flavour brand “Bubble-Up”. The product is an internationally known brand, [ ]. The lemon-lime market accounts for in the region of [ ]% of the total soft drinks market, and 7Up has over [ ]% of the national lemon-lime market. [ ]. A number of own-label alternatives also sell in the lemon-lime market, produced for sale by major supermarket chains and symbol groups.

   8. The Bubble-Up brand is manufactured for sale in both the licensed trade ( 180m1 and 70m1) returnable glass packages and in the grocery/TSN/supermarket sector ( 250m1, 500ml,

   1.5 litre, and 2 litre PET bottles and has been produced in 330ml cans).

   9. The audited turnover of the J Donohoe Ltd group in the year ended 31 December 1997 was IR£[ ] In 1998 the turnover, which has not yet been audited, was IR£[ ]. The turnover in Bubble-Up...