Magazine article Marketing

Virgin Takes a Pop at Coke

Magazine article Marketing

Virgin Takes a Pop at Coke

Article excerpt

Richard Branson last week added an edge to the second birthday celebrations of Virgin Cola by accusing Coca-Cola of using its market domination to unfairly restrict competition.

It is a serious challenge to level but Branson believes he has a case, and is supporting it with a dossier of allegations sent to the European Commission (see box).

"From our experience with British Airways, we see obvious parallels in soft drinks," Branson told a press conference in London last week. With his usual sense of the dramatic, Branson added: "Unless someone takes on these companies, they will get away with murder."

It is not the first time that the Virgin chief has made accusations about uneven playing fields in markets he is competing in. The most notable and justified case being the BA 'dirty tricks' campaign, in which BA sought to unlawfully poach Virgin passengers.

Branson also complained about the radio market, until he was given a London FM licence. He complained about the outcome of the National Lottery pitch too, and made a futile legal attempt to block the launch of Channel 5 after his own bid to run it proved unsuccessful.

So is Richard Branson just a whinger who uses high-profile complaints to promote his brand? Or do his claims about Coke pose serious questions about the nature of the soft drinks market?

Branson claims the joint venture of Coca-Cola and Cadbury Schweppes Beverages (CCSB), which bottles and distributes the firms' brands in the UK, is using anti-competitive sales tactics to prevent other drinks companies gaining a foothold in the market. CCSB group holds about 60% of the UK soft drinks market.

Reaction from the industry last week was dismissive. Some market observers rejected the claims as "misguided and naive". Stuart Fawcett, managing director of Vimto Soft Drinks, said: "With every major marketplace and manufacturer this sort of thing is a fact of life. …

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