CMA closes Unilever abuse of dominance investigation

The Competition and Markets Authority has confirmed that it will not pursue an investigation into whether Unilever’s ice cream promotions breach competition law.

The CMA had launched an investigation into whether Unilever’s promotions offered to retailers between January 2013 and February 2017 excluded rivals.  Unilever offered impulse ice cream (i.e. ice cream products bought for immediate consumption rather than being eaten at home) for free or at a discount if the retailer bought a minimum number of single-wrapped products.

The CMA found no evidence that competitors were adversely affected or that the promotions affected how retail customers bought impulse ice cream.  Unilever’s offers were without distinction as to whether retailers bought more or less popular brands and were made in February and March of each year and not in the summer months where consumption was higher.  Retailers’ acceptance of the bulk discounting offers represented no more than 10% of Unilever’s 2016 sales.

The CMA found that the conduct met the threshold for opening an investigation but it closed the case upon finding that there were “no grounds for action”.

The CMA’s decision may prove to be helpful guidance for future cases and in determining when dominant companies are able to offer discounts on packaged bundles: clearly they can do so without infringing competition law but the boundaries between permissible and impermissible conduct are not always straightforward to draw.