Outlook: Simple solution to the ice-cream wars

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The Independent Online
THE MONOPOLIES and Mergers Commission (MMC) obviously likes ice- cream but it would like a few more flavours to chose from than just Walls. The industry was referred to the MMC yesterday for the fourth time since 1979.

Yet again, the thorny issue of freezer exclusivity - where a manufacturer provides retailers with freezers on the condition that only the manufacturer's products be stocked - will be central to the investigation. Mars, the industry's newest entrant and the main opponent of freezer exclusivity, has argued that the practice severely inhibits competition in the so-called "impulse" ice cream market.

Many small newsagents and corner shops already have a freezer owned by Walls - the dominant industry player with 60 per cent plus of the market - and so stock only Walls' products. This freezes out the competition.

Walls argues that it is unfair to allow rivals to display products for free in a freezer which is wholly paid for and maintained by Walls. But Walls could get round this problem by charging other manufacturers for the right to display their products in Walls' freezers.

The simplest solution is to ban freezer exclusivity. Where it does not operate in the large supermarkets, competition is vibrant, Walls has a far smaller market share and consumers have a wider choice.

To avoid another MMC reference the practice of freezer exclusivity should be outlawed once and for all. Related practices such as full-line forcing - where a manufacturer agrees to provide a retailer with a freezer as long as it also takes the full range of the manufacturer's products - should also be banned. There are many other solutions to the problem of freezer provision which don't involve ripping the customer off.

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