Swiss food giant Nestlé has lost a court case about the use of capsules for its Nespresso machines. According to the French competitor regulator, Nestlé abuses its dominant position in the market.
Warn ahead of changes
The competition regulator accepted complaints by Douwe Egberts and Ethical Coffee Company and forced Nestlé to change its policy regarding the sale and the production of the capsules. For example, Nestlé has to warn competitors three months in advance of technical changes to the equipment, so that they may prepare for the impending changes.
Nestlé has also promised not to label imitation capsules as 'inferior' any more. Until now, Nestlé had always advised its customers to avoid imitation capsules as they were said to cause problems with the machines.
Blows in other countries as well
Nestlé is also struggling to keep its monopoly (or dominant position) in other countries as well, as it has lost court cases both in the United Kingdom and Germany. It had filed complaints itself surrounding Nespresso patent breaches, but lost.
Ethical Coffee CEO, Jean-Paul Gaillard, told The New York Times that he had to close a factory for 6 months after Nestlé had altered its machines. "Nestlé got afraid and started to cheat", he said. Gaillard was partly responsible for the development of these capsules when he was still a Nestlé employee.
Douwe Egberts is pleased with the court's decision, even though the company feels Nestlé is still given too much leeway to continue its unfair limitation of competitors.
According to Euromonitor, the single-dose coffee market is worth 8 billion euro, with Nestlé in control of about a third of that market last year. The French market is apparently responsible for a quarter of all Nestlé capsules sold.