Nestle to make it easier for rivals to sell Nespresso-compatible capsules

Thursday 17 April 2014 17.01
France's competition authority had put pressure on Nestle not to block rivals
France's competition authority had put pressure on Nestle not to block rivals

Nestle has agreed to measures designed to make it easier for rival companies to produce capsules compatible with Nespresso-branded coffee makers.

The company announced a provisional accord pledging that any changes to the technical specifications of its machines - which would make them incompatible with rival capsules - will be announced three months before they are applied.

Nespresso also undertook to stop attempts to persuade its customers to shun other capsules through advertising and statements on its packaging, and to modify aspects of its machine warranty conditions.

The announcement came following under pressure from France's Competition Authority, which will now monitor the market to see if the steps prove sufficient to remove obstacles to other companies entering the market. 

If it is not satisfied, it can proceed to a full competition procedure which could expose the company to fines of up to 10% of its turnover.

France is one of Nespresso's biggest markets, accounting for 25% of global sales of its own capsules.

The agreement came after the Competition Authority expressed concern that Nespresso was abusing its dominant position in the French market by making it difficult if not impossible for rivals to compete with its expensive capsules.

The authority's president, Bruno Lasserre, said it was "troubling" that Nespresso appeared to have made a series of technical changes to its machines from 2009, just as rivals were seeking to enter the market.

"We do not want to deprive Nespresso of its capacity to innovate, but we also want to widen the choice available to consumers," he added.

The capsule issue has also sparked legal battles in Germany and Switzerland.