A franchised bottler of the Coca-Cola Company working in Armenia has taken the country’s anti-trust body to court, considering its latest decision to impose a fine on it groundless.
The State Commission for the Protection of Economic Competition (SCPEC) last week issued a statement, claiming that a recent examination conducted on the basis of a complaint filed by the Jermuk International Pepsi Cola Bottler Armenia company revealed that Coca-Cola obstructed competitors’ entry into the market.
Coca-Cola Hellenic Bottling Company Armenia disagreed with the conclusion, at the same time pointing out inadequacies in the administrative procedures.
The SCPEC, meanwhile, insists that through discounts and other offers of favorable conditions Coca-Cola has compelled dozens of stores to sell only its products, for example, by providing shop owners with company-made retail fridges free of charge, saving them the need to incur additional expenses for purchasing or renting refrigerators. It says the Coca-Coca bottler prohibits the use of the facilities for keeping other beverages, warning that otherwise it could apply certain strict measures.
As a result the SCPEC decided to fine Coca-Cola 50 million AMD (or about $100,000) for the alleged abuse of its dominant position on the market.
Coca-Cola representatives refused to give comments to RFE/RL’s Armenian Service (Azatutyun.am), saying that they did not find it expedient at the stage of litigation.
Economist Vahagn Khachatrian notes the timing of the SCPEC’s statement on Coca-Cola that comes shortly after the commission’s head Artak Shaboyan was pressed by the media to answer why the prices of petrol and bananas in Armenia were considerably higher than those in Russia, with which Armenia now has a common customs space, and even in Georgia. Shaboyan could not provide any intelligent explanation to that, he says.
“His [Shaboyan’s] is just another government body that serves the interests of monopolies and solves no other issue,” said Khachatrian, who is affiliated with the opposition Armenian National Congress party. “Some problem must have emerged. Coca-Cola must have stepped down onto someone’s toes on the market and a decision was made to punish it.”
According to the economist, international organizations have for years been raising the issue of monopolies in Armenia, but the Shaboyan-led body has continuously turned a blind eye to such issues.
“This commission does not fulfill its task. Its activities are not aimed against those holding a dominant position in the market. On the contrary, they ensure a dominant position [for companies],” Khachatrian claimed.
The SCPEC routinely dismisses criticism and accusations from some expert circles and the opposition camp about its abusing its functions as an anti-trust body.