Following a complaint first made by an Italian popsicle manufacturer, “La Bomba” (“The Bomb”), Unilever’s Italian subsidiary, has been fined €60.6 million by Italy’s competition authority for abusing its dominant market position in Italy’s pre-packaged ice cream market through its Algida brand.
La Bomba, based in the seaside town of Rimini, first complained to the Italian authorities in 2013 that Unilever had struck deals with operators of beach resort, bars and campsites to exclusively sell the Unilever’s Algida ice creams, thereby excluding La Bomba’s popsicles from the market.
The competition authority said that their investigation found evidence of a a broad illegal exclusionary strategy that included loyalty rebates through which Unilever’s clients were “obliged or incentivised” to maintain only one brand of ice-cream in their shops through arrangements struck with the company.
“This brought substantial prejudice to the final decision of consumers, limiting their ability to find competitor’s ice-creams, which they might have preferred to Algida based on quality and taste,” the authority said in a statement.
La Bomba earns less then €1 million per annum, whilst the Anglo-Dutch conglomerate makes €1.4 billion euros a year in Italy alone selling the Magnum, Carte d‘Or and Cornetto ice cream brands, as well as other food, home and personal care goods.
Unilever Italy said it “firmly rejects” the conclusion of the Italian authorities and would appeal the ruling to a regional court.