RNS No 7490h
COMPETITION COMMISSION
6 May 1999

                      INQUIRY INTO IMPULSE ICE CREAM:
                 COMPETITION COMMISSION CONSULTS ON ISSUES

The Competition Commission has today sent issues letters to the main parties in
its monopoly inquiry into impulse ice cream. The Competition Commission also
wishes to obtain information and comments by 1 June from any other interested
person, including manufacturers, distributors, retailers or consumers.

An issues letter is always sent to main parties before the Competition
Commission has reached any conclusions and is designed to highlight those
matters which have been identified by the investigating group for further
consideration and to ensure nothing has been missed. The statement of issues is
being made public to inform all interested parties to enable them to give
evidence to the Competition Commission. No conclusions have yet been reached by
the Competition Commission about whether there are any matters which operate or
may be expected to operate against the public interest.

The Competition Commission considers that a monopoly situation may exist in
favour of Birds Eye Wall's Limited (BEW) which supplies at least one quarter of
impulse ice cream in the United Kingdom. The Competition Commission also
considers that there may be a number of complex monopoly situations in favour of
certain manufacturers as a result of various practices:

(a)       The  supply  of  freezers  on terms  which  prevent  or  restrict
retailers   from  using  them  to  stock  ice  cream  supplied   by   other
manufacturers;

(b)       The  supply  of impulse ice cream on terms which  include  volume
related end-year bonuses;

(c)      The supply of impulse ice cream on terms that the retailer may not
stock the product of any other manufacturer; and

(d) The recommending of retail prices.

The Competition Commission is also considering whether there are complex
monopolies   in  favour  of  certain  manufacturers  as  a   result   of
discrimination  against  certain  distributors;  in  favour  of  certain
distributors as a result of providing freezers on terms which prevent or
restrict  their  use to stock ice cream supplied by other  distributors;
and  in favour of retailers, manufacturers and distributors arising from
a practice of retailers not pricing below recommended retail prices.

The Competition Commission is also inviting views on a number of aspects
relating to the definition of the market.

Matters identified for further investigation include:

(a) Distribution, including the operation of Wall's Direct, a new
    distribution system recently introduced by BEW.

(b) Freezer exclusivity.

(c) Other issues on pricing and terms of supply to retailers.

(d) Outlet exclusivity.

(e) Advertising and promotional expenditure. 

(f) Retail prices.

(g) The effect of the above matters on consumers, in particular choice,
    prices, product quality or innovation.

The  Competition  Commission  would  also  welcome  any  suggestions  on
possible remedies to any matters that may be thought to operate  against
the public interest. No conclusions will be reached until the report  is
submitted to the Secretary of State on 21 September 1999.

The  complete  statement of issues may be obtained from the  Competition
Commission web site: www.competition-commission.gov.uk/ice1.htm or,  in
writing,   from:  The  Reference  Secretary  (Ice  Cream),   Competition
Commission, Room 506, New Court, 48 Carey Street, London, WC2A 2JT.

Note to Editors

This  reference was made by the Director General of Fair Trading,  under
sections  47(1),  49(1) and 50(1) of the Fair Trading  Act  1973  on  22
December 1998 (see OFT Press Release No 54.98).


END

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