Ice-cream market referred to MMC

THE pounds 350m market for ice cream bought on impulse has been referred to the Monopolies and Mergers Commission. The Office of Fair Trading is concerned about the practice by some large suppliers of supplying freezers to shops free of charge on condition that they are not used for products from other manufacturers.

The OFT defines the 'impulse' ice-cream market as that in which the ice creams or lollies are for immediate consumption. They are sold mainly through kiosks, newsagents and other small shops. A problem for many of these outlets is that they have little space and cannot have more than one cabinet.

The Wall's brand, part of Unilever, has between 60 and 70 per cent of the market. Its main products include Magnum, Cornetto, Split and Sparkle.

Sir Bryan Carsberg, the director general of the OFT, said: 'Since the MMC last reported on ice cream, Wall's has substantially increased its share in the impulse ice-cream market and I believe that the practice of freezer exclusivity has been a major factor in that.'

He said consumers could benefit from greater choice if retailers were able to stock competing products in one cabinet.

In 1979, an MMC report attacked Wall's, Lyons Maid and other manufacturers for requiring retailers to exclude other products from their outlets and asked them to discontinue the practice. Wall's and Lyons Maid were also asked to stop requiring retailers to enter into supply contracts lasting more than a year.

Wall's admits to demanding cabinet exclusivity when it provides the equipment free of charge. The same practice is used by Nestle.