FCC Provisionally Finds Coca-Cola Liable for Abuse of Dominance in Tanzania Concentrate Supply Market

The Non-Confidential Version of the Provisional Findings - Coca Cola reveals that the Fair Competition Commission (FCC) has provisionally found The Coca-Cola Company (TCCC) liable for abusing its dominant position in the supply of Coca-Cola concentrates in Tanzania. The case originated from a complaint by Nyanza Bottling Company Limited (NBCL), which alleged that TCCC granted its affiliate, Coca-Cola Kwanza Limited (CCK), preferential pricing through an "incidence pricing arrangement" that was not available to NBCL or Bonite Bottlers Limited (BBL).

Following its investigation, the FCC defined the relevant upstream market as the supply of Coca-Cola concentrates in Mainland Tanzania and concluded that TCCC, through Conco Limited, holds a 100% market share in that market, making it dominant under the Fair Competition Act.

The FCC found that TCCC supplied equivalent concentrates to CCK, NBCL and BBL but applied different pricing models. While NBCL and BBL paid fixed prices, CCK benefited from an incidence pricing arrangement that resulted in significantly lower effective concentrate prices. The Commission concluded that this amounted to the application of dissimilar conditions to equivalent transactions without objective justification.

According to the FCC, the pricing disparity placed NBCL at a competitive disadvantage in the downstream carbonated soft drinks market by increasing its input costs relative to competitors. The Commission therefore provisionally concluded that TCCC's conduct constituted an abuse of dominance contrary to section 10 of the Fair Competition Act and had the effect of preventing, restricting or distorting competition.

As a remedy, the FCC has proposed financial penalties and compliance orders requiring TCCC to cease applying dissimilar conditions to equivalent transactions involving CCK, NBCL and BBL. The provisional findings remain subject to written representations, oral hearings and possible settlement discussions before a final decision is issued.