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   The  Commission has taken a decision condemning the Tetra Pak  group  for
   abusing its dominant position, in breach of Article 86 of the EEC Treaty,
   in the market for liquid and semi-liquid packaging machinery and cartons.
   Tetra  Pak,  a  Swiss-based company of Swedish  origin,  is  the  world's
   largest supplier of liquid packaging machinery and cartons, with a  near-
   monopoly  of the Community market for aseptic  liquid  packaging  ("long-
   life"  liquid  products mainly preserved through UHT  processing)  and  a
   considerable  share  of the Community market  for  non-aseptic  packaging
   (used to store fresh liquids, often involving pasteurisation).  In  1990,
   Tetra  Pak had a consolidated turnover of some 3.6 bn  ECU, roughly  half
   of which was in the Community.  About 90% of its turnover is generated in
   the carton market and about 10% in the market for packaging machines  and
   related activities.
   Following  a complaint from Elopak, one of Tetra Pak's main  competitors,
   the Commission has concluded that Tetra Pak has carried out a  deliberate
   policy aiming to eliminate actual or potential competitors in the aseptic
   and non-aseptic markets in machinery and cartons, in persistent breach of
   the Treaty of Rome.  The infringements have involved almost all  products
   manufactured by Tetra Pak, and have had a damaging impact on  competition
   in  all  EC Member States.  In several cases, restrictive  policies  have
   been  in place for over fifteen years.  The infringements are  summarised
   as follows:
   Tetra  Pak  obliged  customers,  mainly dairies, to  stay  loyal  to  its
   products, at the expense of actual or potential competitors, through  the
   use   of  restrictive  clauses  in  its  contracts.  These  included   an
   obligation  on users of Tetra Pak packaging machines to use only  cartons
   made  by Tetra Pak and supplied under its direct  control.  This  enabled
   Tetra  Pak  to assure customer loyalty  artificially,  thereby  excluding
   carton  competitors  and securing revenue on the sale of cartons  for  as
   long  as each machine is in operation.  In all cases, Tetra Pak made  its
   product guarantees dependent on this commitment.
   This,  together with other aspects of its policy (for instance  the  fact
   that  distribution of its products to dairies and other customers in  the
   Community  is  performed exclusively by companies within  the  Tetra  Pak
   group),  had  the  effect  of prohibiting  customers  from  using  either
   competing  brands or Tetra Pak's own brands acquired on potentially  more
   competitive terms.
                                     - 2 -
   Tetra Pak's contracts  also prohibited customers from modifying or moving
   its  machines  or  attaching any apparatus  to  them.   It  reserved  the
   exclusive right to maintain and supply spare parts for its machines, both
   those  it sold and those it rented out.  In many of its  contracts  Tetra
   Pak also imposed a monthly charge to cover maintenance, which it  reduced
   according  to the loyalty of its customers rather than charging  them  as
   and  when maintenance was carried out.  In all its contracts,  Tetra  Pak
   reserved  the  right  to inspect labelling printed  on  its  cartons.  In
   certain  cases,  it  also  demanded monthly reports  from  users  on  the
   consumption of its products and reserved the right to carry out  surprise
   inspections.   Tetra  Pak customers were also obliged to  obtain  similar
   commitments from  new purchasers before reselling Tetra Pak's products.
   Tetra Pak allowed its packaging machines to be rented for a minimum of at
   least three years, and in the case of Italy nine years (initial rent),  a
   condition which the Commission considers unacceptable given the speed  of
   technological  change effecting such machines.  In order to  enforce  its
   contracts,  it also reserved the right in Italy to  impose  discretionary
   penalties  on  companies of up to 10 % of the initial rental fee  or  the
   equivalent of about one year's rent.
   Tetra  Pak's  restrictive  use of contracts enabled  it  to  segment  the
   European  market and thereby charge prices which differed between  Member
   States by up to about 300 % for machines and up to about 50% for cartons.
   In  some  cases,  the initial rental fee of a packaging  machine  in  one
   Member  State  would  be  higher than  the  purchase  price  in  another.
   Evidence  gathered  during the Commission's inquiry also  shows  that  at
   least  in  Italy and the United Kingdom,  Tetra Pak sold its  "Rex"  non-
   aseptic  products  at  a  loss for a long  time  in  order  to  eliminate
   competitors,  and  used  the proceeds from its sales  of  "Brik"  aseptic
   cartons  to subsidise the losses.  In Italy, Tetra Pak sold  Rex  cartons
   for  several years at up to 34 % below cost price and sometimes  at  less
   than  the  cost  of the raw materials  used  for  its  manufacture.  This
   predatory  pricing  policy  had  serious  consequences  on  Tetra   Pak's
   competitors, notably Elopak, which was obliged to close a new  production
   facility in Italy.
   In  certain cases, Tetra Pak bought competing machines with  the  express
   intention  of  removing  them from the market,  and  on  other  occasions
   obtained  commitments from users not to use such machines or to  restrict
   their  use to within their premises.  In Italy it also sought to  prevent
   competitors  from advertising by obtaining an exclusive  commitment  from
   one journal not to carry competing publicity for at least a year.
   In view of the number, gravity and in several cases the long duration  of
   the  infringements committed on the Community market, and  their  serious
   impact on competition in the entire sector, the Commission has decided to
   impose on Tetra Pak a fine of 75 MECU.
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