Spanish Courts Confirm Decision on Abuse of Dominant Position by Tabacalera-Altadis
In 1996, Conway (then known as McLane) submitted a complaint to the Spanish Competition, the Servicio de Defencia de la Competencia (“SDC”) authorities, alleging that the former public tobacco monopoly, Tabacalera (now known as Altadis) abused its dominant position by not allowing Conway to distribute Tabacalera tobacco brands. A 2002 SDC decision found that Tabacalera had a dominant position in the tobacco manufacturing market as well as the wholesale distribution market.
In the view of the SDC, even if Tabacalera's market share was lower than other competitors (Tabacalera held a 36 percent market share), it still held a strong position since it was once a national monopoly.
The decision obliged Altadis to supply its products to Conway on a non discriminatory basis, thereby allowing Conway to distribute its tobacco brands. Altadis was also fined €3 million ($3.75 million).
In response, Altadis brought the decision before Spanish courts, where it was upheld. Altadis has now lodged an appeal against this judgment before the Spanish Supreme Court. Conway has recently stated that it is considering pursuing a claim that the obligation to supply should be implemented immediately, as well as considering whether to seek damages for Altadis’ breach of the authorities' decision.