Masterfoods yesterday scored a significant victory over its rival Unilever as the European Court of First Instance ruled on the battle for Ireland's ice-cream market.

The court decided to uphold the European Commission's judgement that Unilever, parent company of HB Ice Cream, had abused a dominant position on Ireland's market by supplying freezers to retailers on condition that they were not used to stock ice-creams of any other brands.

The Court said that Unilever could not supply freezers with an exclusivity condition so long as it holds a dominant position on the market for individually-wrapped ice-creams, the so-called impulse buys.

HB Ice Cream makes the top-selling brands, Iceberger, Choc Ice and Magnum as well as the Cornetto. Unilever's lawyers are still examining the ruling and in theory can appeal on any point of law to the European Court of Justice, but that looks unlikely. Mr Paul Murphy, managing director of HB Ice Cream, said yesterday that, on the face of it, the court's judgement changed the rules of the game.

His company supplies about 9,000 freezer cabinets and in about 40 per cent of cases is the sole supplier. Mr Murphy conceded that it would no longer be possible to impose exclusivity on that 40 per cent.

"In this situation the retailer will be the person who decides what to stock.. We are confident that decision will be based on what the consumer wants," he said. Retailers were under no obligation to stock other brands, using up valuable selling space, he said.

Masterfoods, whose products include the Mars, Snickers and Galaxy brands, attempted to get into the Irish market in the late 1980s. It challenged Unilever's exclusivity agreement in the Irish courts and complained to the European Commission.

But Masterfoods suffered a setback when the high court issued an injunction in 1992, preventing the company from inciting retailers to break their exclusivity agreements. Masterfoods appealed against the injunction but the appeal has been waiting on the decision from the European Court.

Ms Catherine Bent, spokeswoman for Masterfoods, said she was "very pleased" with yesterday's judgment. She said she would now expect the High Court injunction to be revoked. Mr Murphy conceded that following the European ruling that would appear to be "a pretty straightforward formality".

The European Commission had argued that the Ireland's small retailers did not have the space to stock more than one freezer cabinet and that the cost of running an extra cabinet was also dissuasive.

For the European Commission, the judgment was a welcome victory after a series of defeats at the European Court.