Schweppes' detectives monitor its tonic water sales in Spain
Schweppes has hired detectives in Spain to guarantee that the distributor Red Paralela has stopped importing its tonic water from UK, where the brand belongs to its competitor Coca-Cola.
Schweppes' legal representatives explain that this is the only way to know whether this Spanish distributor, which buys the drink in UK to sell it afterwards to the horeca channel in Spain, has skipped or not the judicial resolution which prevents it from importing the tonic water.
The Suntory group, current owner of Schweppes, has so far filed 45 lawsuits against Spanish distributors for buying the tonic water from Coca-Cola in the British market, where it is cheaper, to sell it later in Spain.
In 1999, Cadbury Schweppes reached an agreement with Coca-Cola to sell its soft drink business worldwide, except in US, France and South Africa, for $1,8 billion. The problem arose when the European competition authorities vetoed the operation, considering that Coca-Cola already had a dominant position. Thus, the Atlanta giant could only kept the Schweppes brand in UK, Ireland and Greece.
Schweppes, which ended up in the hands of Suntory group, faces an import of its own brand from the British market, where it belongs to its biggest competitor. According to Schweppes, the import of British tonic water implies the loss of 6% of this beverage sales.