Escolar Documentos
Profissional Documentos
Cultura Documentos
1993.
CompetitiveSuccessand
the Law:
Professorof Economics
Lausanne
Tetra Pak
No
June
Box 1
Raw Materials
Highly Concentrated
Capital Intensive
Low to Medium Growth
Food Sector
Food Retail
Raw material
Packaging
Manufacturing
Distribution
Total Cost
12%
10%
47%
31%
Retail Alliances
Scanner Technology
Direct Product Profitability
Consumer
(DPP)
Ecology
Convenience
Price
100%
a range of competitive
JI
191
Box 2
Tetra Brik
Tetra Rex
Tetra King
Tetra Top
l
Tetra Classic, the original tetrahedron-shaped
carton, minimized packaging material and had been extremely
1950s; it was followed in 1961 by its aseptic version which permitted the storage and transport of perishable
unrefrigerated
conditions.
successful in the
food products in
l
Tetra Btik cartons, introduced in 1963, offered a modular shape that precisely met the stacking requirements of international
loading pallets and, through this, effectively reduced the packaging portion of a trucks total cargo weight to a mere 740; its aseptic
version, introduced in 1969, improved distribution economies even further and since then has become the most widely used package
for long-life products.
l
Tetra Rex, a more traditional package, was supplied, starting in 1966, as prefabricated flat blanks or formed, after the Tetra
Pak principle, from a roll of packaging material in the Tetra Rex machine. Tetra Rex cartons were used worldwide for pasteurised
products and gradually supplanted the non-aseptic brick as the main carton for fresh products.
l
Tetra King, introduced in 1978, combined light weight sturdiness and good insulation properties through the use of expanded
polystyrene and its distinctive shape. The package was primarily used for milk, yoghurt and other dairy products, juices and wine.
l
Tetra Top, the most recent addition to the Tetra Pak product line, was recloseable
of opening, pouring and reclosing.
and addressed
consumer
demands
for ease
Tetra Paks packaging systems relied on a combination of a unique filling process, constantly improved
machinery and a proprietary carton design. In a typical
filling operation, machines drew packaging material
from a roll, formed a tube, then sealed it in a standing
column of liquid. Although the different packaging
types required different machines, the basic concept of
a continuous, closed and therefore extremely hygienic
operation had been adapted to all of them. By comparison, PKL, the only other major competitor in the
aseptic segment, delivered its brick-type Combibloc
carton pre-shaped to the fillers; the same was true for
Elopaks Pure Pak carton, as well as PKLs non-aseptic
Combibloc, Quadrobloc and Pergabloc which competed
with Tetra Pak in the non-aseptic segment.
Six European assembly factories supplied Tetra Paks
packaging machines and parts directly to customers in
112 geographic markets and were known for their high
levels of quality control at each stage of production. The
company guaranteed that every single component was
tested and all machines were test run and subject to
rigorous final inspection before delivery. Not one of the
6,520 Tetra Pak machines in operation in 1992 had been
produced under licence, Tetra Paks machinery was
either sold or leased. The leasing contract comprised a
192
193
COMPETITIVE
SUCCESS
xhibit 1
Average
Rex
200
Italy
Germany
100
0,
1981
1982
UK
Non-asentic
1983
1984
Brik
200
Italy
100
Germany
UK
0
1981
1983
1982
Aseptic
1984
Brik
200
Italy
Germany
100
j,j
UK
0
1981
Source:
Adapted
1982
1983
1984
EUROPEAN
MANAGEMENT
JOURNAL
Vol
11 No 2 June 1993
COMPETITIVE
SUCCESS
Exhlblt 2
Rex Machine
RC 6
180
60
07.80
07.80
07.80
07.80
02.81
03.81
11.81
05.81
06.81
07.81
10.81
Non-Aseptic
83.82
83.82
10.81
05.82
10.82
il.82
12.82
02.83
0.283
02.83
06.83
09.84
12.84
03.82
Aseptic
01.82
06.82
86.82
09.83
80
12.75
07.78
01.82
07.82
02.83
01.84
11.84
03.85
Source: Adapted
EUROPEAN
MANAGEMENT
JOURNAL
195
COMPETITIVE
SUCCESS
Exhibit 3
Rex Machine
RC 6
Rex Machine
300
RC 6
200
200
Belgium
(2)
Germany
Italy (1)
(1)
Ireland (2)
100
UK (1)
Spain (2)
100
France (1)
0
1986
1985
Non-Aseptic
Brik Machine
1985
88
1986
Non-Aseptic
Brik Machine
B8
150
Ireland (2)
Italy (1)
Germany
Ireland (2)
100
(1)
Spain (2)
UK (1)
50
0
1986
1985
Aseptic
Brik Machine
1985
Aseptic
AB 3
300
1986
Brik Machine
AB 3
126
100
Denmark
(2)
Germany
(1)
80
Italy (1)
Ireland (2)
60
UK (1)
France (1)
1985
40
1986
196
Adapted
1986
1985
Source:
Spain (2)
Source:
EUROPEAN
Adapted
MANAGEMENT
JOURNAL
Restrictive Contracts
T&a Pak obliged customers, mainly dairies, to stay loyal
to its products, at the expense of actual or potential
competitors, through the use of restrictive clauses in its
contracts. These included an obligation on users of Tetra
Pak packaging machines to use only cartons made by
Tetra Pak and supplied under its direct control. This
enabled Tetra Pak to assure customer loyalty artificially,
thereby excluding carton competitors and securing
revenue on the sale of cartons for as long as each
mtchine is in operation. In all cases, Tetra Pak made
its product guarantees dependent on this commitment.
This, together with other aspects of its policy (for
instance, the fact that distribution of its products to
dairies and other customers in the Community is performed exclusively by companies within the Tetra Pak
gn)up), had the effect of prohibiting customers from
using either competing brands or Tetra Paks own
br,lnds acquired on potentially more competitive terms.
Tetra Paks contracts also prohibited customers from
modifying or moving its machines or attaching any
apparatus to them. It reserved the exclusive right to
maintain and supply spare parts for its machines, both
those it sold and those it rented out. In many of its
contracts, Tetra Pak also imposed a monthly charge to
coler maintenance, which it reduced according to the
loyalty of its customers rather than charging them as and
when maintenance was carried out. In all its contracts,
Tetra Pak reserved the right to inspect labelling printed
Pak vigorEuropean
aspects of
Pak will
197
Endnote
A review of policy discussions surrounding this development indicates that, what initially appeared to be merely
a periodic surge in regulatory interest, indeed reflects
a lasting trend towards more comprehensive
and
stringent competition controls. Companies trying to
avoid prosecution need to understand how their relevant
authorities define a potentially detrimental level of
market power and which type of business practices are
considered to primarily support abusive intentions.
Unfortunately, despite the enforcement zeal, there are
so far no generally applicable rules that companies could
easily translate into compliance procedures to guide
their daily operations.
First, to the extent the national authorities stipulate
market share benchmarks as proxies for market power,
these standards not only differ country by country but
are mostly applied with varying degrees of restrictiveness depending on the industry or the case at hand. Yet,
even if one general threshold was absolutely binding
internationally and across industries, there still remains
room for judgement on how to define the relevant
geographic and product market in which to measure a
companys position. At a time when the apparent
management folklore of blurring industry boundaries,
internationalizing
markets and competence-based
competition increasingly turns into industrial reality,
any review of recent EC case decisions illustrates the
regulators difficulties in ident~ying the scope of the
relevant markets.
Second, as regards the evaluation of grey-area business
practices, such as exclusive dealings, differential or
below-cost pricing, or tied selling, harmonization efforts
are underway to create legal certainty en bloc, that is
through one, generally negative, judicial perspective.
Yet, as all of these practices can potentially improve the
economic efficiency of company operations and its
commercial relations while presenting a lever for abuse,
declaring them illegal per se would mean asking companies to choose between legally acceptable and
economically efficient, and for that reason frequently
established, business practices. Hence, most judicial
systems provide for some sort of efficiency defence given economic arguments can be used to justify a
digression from the competition standard.
In this context, the Tetra Pak case makes for good if
sobering management reading. Without defending the
companys at times questionable market behaviour or
criticizing the regulators thinking in legal straightjackets,
it remains worrisome to observe that identical data can
easily lead to diametrically opposed interpretations.
Was Tetra Paks strategy not intended to leverage the
companys skills and assets in supplying packaging
material to milk producers so as to create a formidable
and competent partnership for total packaging and
distribution solutions? And did the required technology,
marketing and especially pricing decisions not reflect
the logic of portfolio management and the differences
in profit potential across a country-product matrix over
Advantage
is due to
of
and
*
4
Product
lntr~u~tion
and Market
in
Penetration,
Price-Discrimination,
Cross-Subsidization,
Predation
and Ownership
Controlling
Manufacturing
Machine
. Monopolization
of all
and Pre-emption
of Technology
Market
of Technology
Hopefuls
Dependence
* Systematic
Finance
Interest through
Exclusive
and Distribution
Sales Territories
In-house
of ~mpetition
Destruction
(Elopak)
of Reference
for Buitoni
and Elopak
Product
New
Prevention
to Pre-empt
of Intra-brand
Unreasonable
Maintaining Brand/G~dwill
and reducing Transaction
Costs through One-time Shopping of Machines,
Parts, Materials, Service and Guarantee
Proliferation
Entry
Com~tit~on
Tying of Customers
to Prevent
Entry
References
1. See Commission Decision,
1993.
199
COMPETITIVE
SUCCESS
RALF BOSCHECK,
IMD,
Chemin de Bellerive 23,
PO Box 915, CH-2001
lausanne,
Switzerland
Ralf Boscheck is Professor of
Business Policy and
Economics at the International Institute for
Management
Development,
IMD, Lausanne. Next to
his teaching and consulting
.
work in industry analysts and company strategy, he
is involved in setting up 1MDs Industry Resource
Center which works with one key company in a
selected range of sectors to provide for on-going
industry and market monitoring, and competitor
assessments.
The focus of this work is on developing
an integrated framework for industry and competition analysis, which helps to address a whole range
of competitive interactions, from the dynamics of the
global industrial base to the protection of the
internal skill-sets of the successful firms. In the
process, an attempt is made to bridge the apparently
widening gap between company and public policy
perspectives on what it takes to attain, sustain and
exploit a competitive advantage and at what costs
and benefits to society at large.
200
EUROPEAN
MANAGEMENT