The Nespresso trick

Despite new rules in Switzerland, potential customers buying online abroad are re-directed to the more expensive Swiss shop. This is "inadmissible", say the consumer protection organisation. Nespresso sees it quite differently.

From the beginning of the year, retailers in Switzerland are no longer automatically allowed to redirect their customers who want to shop abroad to a local – and usually more expensive – branch of an online shop. It is also forbidden to completely exclude consumers from a foreign online offer with so-called ‘geoblocking’.

But the coffee capsule giant Nespresso obviously cares little about the new requirements. People who try to access the nespresso.de website from Switzerland in order to order coffee without a Swiss surcharge find themselves transferred to the Swiss online shop. They are forwarded directly to nespresso.com/ch/de.

The price differences between the two digital stores are considerable. A capsule of the "Arpeggio" variety – advertised as "intense and creamy" – costs 53 Rappen from the Swiss branch. In the German online shop, on the other hand, the same product is available for the equivalent of 42 Rappen. This results in an equally intensive price premium of over 20% for the capsule coffee.

Nespresso's practice is problematic
Complaints against such allegedly unfair business practices are collected by the State Secretariat for Economic Affairs (Seco). With regard to Nespresso’s geoblocking trick, the authority writes: "If a customer in Switzerland is automatically redirected to the Swiss website, i.e. without his consent, this could be a violation of the above-mentioned provision." According to Seco, mitigating circumstances are provided by the fact that customers are at least given the opportunity to manually enter the nespresso.com/de/de address. "This defuses the situation, as the customer in Switzerland can thereby shop on the site like a local."

Nespresso capsules In Switzerland are 20% more expensive than in Germany     Nespresso/grisslee

There have been no complaints against Nespresso so far. As soon as Seco receives several reports, however, it can sue a company. According to the law, unfair competition is punishable by imprisonment of up to three years or a fine.

"This is not permissible"
The Consumer Protection Foundation is also entitled to sue, and is currently evaluating hundreds of reports of suspected geo-blocking violations from the population and, where necessary, is preparing lawsuits. In the case of Nespresso, André Bähler, Head of Politics and Economics, the case is clear: "This is not permissible." It is true that customers can make a manual adjustment in the address bar and thereby shop in euros. But you have to realise this first, he adds.

While Nespresso is one company that is acting stubbornly, André Bähler draws a positive balance from the geoblocking rules that were introduced at the beginning of the year. "Most companies have implemented the regulations, or react quickly as soon as we point them out." During the debate about the law, it was often argued that foreign providers in particular are hardly likely to adhere to geo-blocking requirements. "In fact, however, international companies, such as the travel provider Tui, have also accepted this rule." The Consumer Protection Foundation is convinced that the new provisions in the law against unfair competition will reduce the over-pricing in Switzerland.

Customers can thereby directly see how high the price differences are for identical products. It’s true that there is no obligation for a foreign shop – for example, the German branch of Nespresso – to deliver to Switzerland at these prices. But coffee lover from Switzerland can at least have the goods delivered to a German address. There are also specialised companies that forward such orders to Switzerland. "In the longer term, this will mean that Nespresso will have to think about reducing the Swiss surcharge," says André Bähler.

How the coffee giant justifies itself
In any case, Nespresso is unapologetic when it comes to the geoblocking trick. "As the global website is automatically linked to a local Nespresso website, a customer who goes directly to www.nespresso.com, without the geographical indication, will be directed to the website of the country in which he is located," the company writes on request. This simplifies the "customer experience". This also explains the automatic forwarding from nespresso.com – but not from nespresso.de to the Swiss online shop.

Nespresso goes on to say that it has a single global website "to ensure the unique presence of our brand and prevent domain name fraud". Every consumer, regardless of their location, can freely access the Nespresso website of their choice. The company is convinced that this is "fully in line with the new regulations" and stresses that everyone will be able to access the website of the desired country.