On 7 August 2013, the District Court of East Brabant (the "Court") issued an interim decision in a case between Mars and Nestlé (232816 / HA ZA 11-1168). The case concerned a complaint by Nestlé that Mars acted in violation of competition law by introducing an incentive programme which would stimulate independent owners of petrol stations to give Mars products and displays a prominent position in the petrol station shops.
The incentive programme provided the petrol station owners with a remuneration relative to their turnover in Mars products and a one-off bonus if they would comply with certain conditions relating to the presentation of the Mars products in the shops.
Nestlé claimed that the programme was in violation of competition law as it was not able to match the incentive programme of Mars without suffering structural losses. As a result, Nestlé would be driven out of the Dutch market of sales of out-of-home candy bars and bite-sizes via petrol stations.
With regard to the market definition, the Court decided that that there is a distinction between sales of chocolates via the out-of-home channel, meant for consumption out-of-home and/or on the way, and the at-home channel supermarkets. Mars would have a market share on the out-of-home market for chocolates in the Netherlands of at least 50.6%. According to the Court, it was not necessary for the purpose of the case to further define the relevant market.
The Court then considers that the incentive programme strongly resembled a category management agreement in the sense of the European Commission Guidelines for Vertical Agreements. Category management agreements are agreements by which the distributor entrusts the supplier with the marketing of a category of products including, in general, not only the supplier's products, but also the products of its competitors.
A category management agreement does not have the object but may have the effect of restricting competition. According to the Court the relevant question was whether a competitor as efficient as Mars could match the incentive programme of Mars. The Court came to the conclusion that it was not economically viable for Nestlé to introduce an equivalent incentive programme, as it would not be able to recoup its variable costs.
The Court did in this interim decision not decide whether the incentive programme lead to anappreciable restriction of competition. The Court gave Nestlé the opportunity to prove that this is the case. The Court intends to instruct an expert to compare the sales of chocolate products and the development of the market shares of Nestlé and Mars in petrol stations that participated in the incentive programme with similar petrol stations that did not participate in the programme.