The Turkish Competition Authority has imposed a significant antitrust penalty of 1.3 billion liras ($36 million) on Frito-Lay, a subsidiary of PepsiCo Inc., following an extensive investigation into the company’s competitive practices.
The ruling, announced on Saturday, is aimed at fostering a more competitive market for packaged snack foods in Türkiye, was reported by Bloomberg.
Frito-Lay, a dominant force in Türkiye’s snack industry with brands such as Lays, Ruffles, Doritos, Cheetos, and Çerezza, was found to have engaged in practices that allegedly obstructed the sales of rival brands. The Turkish Competition Authority initiated its investigation in response to concerns that Frito-Lay and its distributors may have limited competitors’ access to sales outlets, particularly small grocery stores and kiosks.
Findings of the Investigation
The probe, which was launched following a preliminary inquiry in February, revealed that Frito-Lay engaged in several anti-competitive activities, including:
- Restricting competitors’ sales to outlets purchasing Frito-Lay products.
- Reducing the visibility of rival products in retail stores.
- Removing competing brands from store shelves.
- Establishing verbal exclusivity agreements with retailers to limit the availability of rival products.
As part of the penalty, Frito-Lay will also be required to allocate a section of its display stands to rival brands in smaller stores where these competitors lack their own display presence. This measure aims to increase consumer choice and level the playing field for smaller snack companies in Türkiye.
Broader Implications and Historical Precedents
This is not the first instance of regulatory action against Frito-Lay in Türkiye. The company was previously fined nearly 88 million TL (Turkish Lira) in late 2022 for involvement in a cartel-forming scheme. Additionally, in 2013, Frito-Lay faced an 18 million TL fine for violating competition regulations.
The latest penalty is part of a broader enforcement initiative by the Turkish Competition Authority, which levied a total of 7.7 billion liras in administrative fines on corporations in 2024, according to reports by the Anadolu Agency.
The regulator hopes that its measures will promote greater competition in the snack food industry by making it easier for smaller brands to enter and compete in retail spaces. This move aligns with the authority’s ongoing commitment to ensuring fair market practices and preventing monopolistic behavior in the Turkish economy.
Industry Impact and Future Outlook
The decision is expected to have a considerable impact on the Turkish snack industry, particularly in how multinational corporations conduct business in the country. Moving forward, Frito-Lay and other major players in the market will likely have to reassess their distribution and sales strategies to ensure compliance with Turkish competition laws.
The Turkish Competition Authority’s firm stance on anti-competitive behavior serves as a warning to other corporations operating in Turkey, reinforcing the country’s commitment to a fair and open marketplace.
