Abstract
Coca-Cola has faced antitrust scrutiny internationally for its policies pertaining to cooler access for rival carbonated soft drink (CSD) brands. Concerns regarding the fair distribution of refrigerator space in retail establishments for smaller competitors were similarly raised in South Africa by the 2016 merger of Coca-Cola Beverages Africa Limited (CCBA) with several South African bottling companies. The Coca-Cola Company (TCCC) was ordered by the South African Competition Tribunal to give rival CSD manufacturers at least 10% of its cooler/fridge space in order to address these problems. The study conducts an ex-post assessment of how the conditions have affected retailers' distribution of shelf space and promotional strategies. It evaluates the effects on the competitiveness of CSD producers as well as how some of Coca-Cola's competitors modified their marketing and distribution strategies in response to the fridge space condition. The study examines the effects of the circumstances on the CSD market in South Africa using a thematic approach based on qualitative interviews with 15 retailers and additional outside sources. The results show that most retailers fail to meet the 10% criterion. Notably, the merger has given Coca-Cola more negotiating and logistical power, which has resulted in smaller businesses having a smaller shelf presence and consumers preferring Coca-Cola products because they are easier to find. Competitors have launched locally made products, employed alternative distribution channels, like unofficial sellers, and employed targeted marketing strategies in an effort to differentiate themselves from the competition and stay relevant in the market. The study finds that the 10% fridge space condition, which was intended to increase competition in retail settings, has unintentionally increased Coca-Cola's market power and failed to curb its dominance. Coca-Cola has used the absence of stricter enforcement, retailer reliance, and infrastructure control to strategically navigate the situation. These results demonstrate that in order to achieve the condition objective of market fairness, competition laws must be stronger, more enforceable, and outcomes-oriented. Given the tactics that strong incumbents can use to circumvent some competition laws, the study findings offer insights into the competitive dynamics found in CSD markets and guidance on how to design conditions that facilitate competitive practices.