The Caola Cosmetics and Household Chemicals Joint Stock Company (hereinafter: Caola) and the Unilever Hungary Investment Ltd (hereinafter: Unilever) concluded three types of agreements, and they applied for a preliminary exemption to the Office of Economic Competition (hereinafter: OEC) before the agreements come into force.

The Co-operation Agreement stipulates that Caola will be the permanent however not exclusive producer and developer of Unilever cosmetics and cleaning compounds on the territory of Hungary and beside that Caola will keep producing and distributing its own products.

In the framework of the Agreement on Purchasing of Intellectual Property Unilever purchases the intellectual property rights (e. g. trade-marks, industrial samples, patents) for Caola products, like Caomilla and Baba. Concerning the intellectual property right of the third Caola product (WU-2 hair shampoo) Unilever offers selling option to Caola while Caola insures a right of preemption for Unilever.

According to the third agreement (Agreement on Manufacture) Caola undertook to manufacture, in addition to the above three products, certain type of deodorants and the Amodent tooth-paste for Unilever in the framework of commission processing and separately charged material costs.

The aim of the agreement of the two undertakings is hindering the long-lasting deterioration of Caola`s market position on the one hand and creating a strong market position for Unilever on the other.

The Competition Council exempted the agreements of the undertakings from the prohibition under the Competition Act and the justification was the following:

There were strong competition on the markets of the relevant products, therefore the agreements do not involve restriction of competition, on the contrary, competitiveness will be improved by the efficient working practices of Unilever and the Hungarian labour force and the competitive suppliers applied by the Caola. In the consequence of the improving competitiveness public interest will be also promoted.

June 25, 1997. Budapest

dr. Bodócsi András sk. előadó
Fógel Jánosné dr. sk.
dr. Kállai Mária sk.
Szabó Györgyi