The Australian Competition and Consumer Commission has sided with Aldi in a battle over the discount retailer’s sale of cheep Nestlé imports.
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Nestlé Australia moved to stop supplying Aldi following the retailers importation and sale of the Nescafé brand from Indonesia and Brazil.
“The notification concerns a refusal by Nestlé Australia to supply Nestlé branded products, including Nescafé Blend 43 instant coffee and Milo, and private label products to Aldi Stores unless Aldi complied with Nestlé Australia’s conditions on the presentation and advertising of the imported products”, ACCC Chairman, Graeme Samuel, said today (10 August).
Aldi would not agree to display imported Nescafé coffee in the way that Nestlé Australia demanded.
“The ACCC believes that Aldi was already taking adequate steps to differentiate the imported Nescafé instant coffee from Nescafé Blend 43. Nestlé Australia told the ACCC that it wanted consumers to know that the imported products were not the coffee brands they were familiar with, and that they tasted different.
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By GlobalDataThe ACCC said that it believes Nestlé Australia wanted to substantially lessen competition in the instant coffee market. “The ACCC has decided that the notified conduct has an anti-competitive purpose. The ACCC also considers that the conduct has the effect or is likely to have the effect of substantially lessening competition, and does not result in a net public benefit. In these circumstances, the ACCC is required to issue a notice to revoke,” Samuel said.
Nestlé challenged the factual basis of the ACCC’s conclusions, and in response the governmental agency provided detailed quotes from Nestlé’s internal documents.
“The ACCC considered that Nestlé Australia’s purpose was to discourage and eliminate a new source of competition for the local (Australian) Nescafé instant coffee brands. The ACCC believes that part of Nestlé Australia’s anti-competitive purpose was to remove the stimulus to other Australian grocery retailers, who might have responded to Aldi’s sale of the imported Nescafé instant coffee by discounting Nescafé Blend 43 or importing similar products. The ACCC also believes that Nestlé Australia’s conduct has, or is likely to have, an anti-competitive effect in the local retail grocery markets where Aldi has stores,” Samuel concluded.
