European Union Business Law Case Study

Case Study:

Scenario

Freaky GmbH, a German manufacturer of alcohol laced fruit drinks is one of only three main producers of this product within the EU, the other two being a French manufacturer La La Vroom and a Dutch manufacturer. Geldos. .Between them they supply the whole of the internal market with the exception of the UK.

In the UK, Freaky is the only supplier of alcohol laced fruit drinks with their highly successful brand Kill me Quick. This is sold in fluorescent green paper cartons with a complete list of ingredients provided on the back of each carton. Young people under the age of 23 account for almost the entire consumption of Kill me Quick in the UK and indeed account for a large part of the alcohol laced fruit drinks market across the rest of the EU.

Unfortunately the last year has seen a reduction in the general demand for alcohol laced fruit drinks across the EU and the marketing director of Freaky, writing in the European Trading Journal, suggested that the only way that the sale of alcohol laced fruit drinks would survive the market downturn would be to increase prices by 5%, allowing more money to be spent on research and the development of different flavours and combinations of the drink.

At the beginning of December 2015 Freaky increased the price of its alcohol laced fruit drinks by 5%. A week later, La La Vroom and Geldos also increased prices by 5%. In January 2016, Freaky increased the price by a further 5%. This was followed by La La Vroom a week later and Geldos a fortnight later. In February 2016 there was a 2% price increase by Geldos, followed a week later by La La Vroom and Freaky.

Further problems have emerged for Freaky with information that the UK Government is currently considering the adoption of a (fictitious) number of legislative measures intended to control the way that alcohol drinks are promoted in the UK. As this is a highly successful market for Freaky they are obviously very concerned that their supply of this product to the UK will be affected.

The new UK measures include the following:

• An outright ban on the display of any advertisement for alcoholic drinks on advertising billboards situated within a one thousand metre radius of a school.

• A requirement that no fluorescent colours should be used on the packaging of alcoholic drinks

The proposed new laws have arisen as a direct result of the UK Government’s concern on the adverse effect of alcohol on public health particularly that of young persons and it is intended that any breach would constitute a criminal offence.

Task

With appropriate reference to EU legislation and case law you are required to critically examine and discuss the issues raised in this scenario