- The Washington Times - Friday, September 3, 2004

BRUSSELS (AP) — The European Union is moving closer to settling its long-running antitrust case against the Coca-Cola Co., having judged the beverage giant’s offer to modify distribution deals in Europe good enough to begin gauging the industry’s reaction, sources close to the talks said yesterday.

The European Commission is sending letters to Coke’s soft drink rivals and other third parties seeking their input to the offer made by Coke in early August, three sources said on the condition of anonymity.

A Coca-Cola spokesman would not comment yesterday on the details of the offer, but confirmed that the European Union was moving forward with industry consultations.

“We do believe that we have addressed the concerns that were raised,” said Coke spokesman Jonathan Chandler.

In a filing yesterday with the U.S. Securities and Exchange Commission, the company said it had “recently submitted draft proposals” to address the EU’s concerns.

“The commission has advised the company that it intends to share these proposals with parties involved … including retailers and other beverage suppliers, for their comment,” the filing said.

An EU spokesman declined to comment on the case.

Testing the market’s reaction to a proposal is one of the final steps in settlement negotiations and indicates EU antitrust regulators consider the proposal to be a good basis for a deal, even if disagreements about a few points persist.

EU Competition Commissioner Mario Monti is understood to want the five-year-old case wrapped up before his term expires at the end of October. Sources said the preliminary settlement could be published as early as mid-October and be made binding the following month.

The case was sparked by a complaint from Pepsico Inc. in the 1990s that Coke’s distribution deals in Europe unfairly restricted access for competing products to store shelves and coolers.

Atlanta-based Coke has roughly half the European market, compared to about 10 percent for Purchase, N.Y.-based Pepsico’s Pepsi Cola unit. In the United States, Coke’s lead over Pepsi is smaller.

According to the sources, Coke has offered to scrap all rebates that require retailers to reach specific sales or growth targets. It also will no longer link discounts on flagship products to sales of new flavors or less-popular brands, and promised to drop requirements that all its products be displayed together on store shelves.

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