FDBusiness.com

European Commission Fines AB InBev €200 Million For Restricting Cross-border Sales of Beer

 Breaking News
  • £50 Million Telford Expansion Gives Müller 500 Million Pot Capacity A £50 million expansion project by Müller UK & Ireland to build a chilled yogurt manufacturing facility capable of producing 500 million pots each year in Telford, England, has been completed. The investment, which has created 65 new jobs in the area, enables Müller to meet growing demand from consumers for branded and private label yogurts made with [...]...
  • A Question of Balance for Clean and Clear Label Clean and clear labeling concerns are now well established in the food and beverage industry, having featured as a key and running theme through all Innova Market Insights’ Top Trends forecasts in recent years. More than ten years ago ‘Go Natural’ led the company’s annual top trends listing and since then clean label claims have [...]...
  • Bord Bia Drive to Make Potatoes More “Insta-friendly” With the Millennial Consumer Potatoes are still the most consumed carbohydrate in Ireland with 97% of all households purchasing potatoes and a recorded growth in purchase of 1.3% to September 20181. Irish people are eating potatoes on average more than 3 times a week, however, millennial consumers are buying with less frequency than the overall market. To understand the reasons behind [...]...
  • PepsiCo Targets African Growth in $1.7 Billion Deal PepsiCo has agreed to acquire all the outstanding shares of Pioneer Foods Group of South Africa for approximately US$1.7 billion. Pioneer Foods has a robust, locally relevant product portfolio that complements PepsiCo’s current line-up, with strong positions in cereals, juices, and other African nutritional food staples, including well-known, scaled brands like Weet-Bix, Liqui-Fruit, Ceres, Sasko, [...]...
  • WHO/Europe Studies Find Baby Foods are High in Sugar and Inappropriately Marketed For Babies Two new studies from WHO/Europe show that a high proportion of baby foods are incorrectly marketed as suitable for infants under the age of 6 months, and that many of those foods contain inappropriately high levels of sugar. WHO’s long-standing recommendation states that children should be breastfed, exclusively, for the first 6 months. Its 2016 [...]...

European Commission Fines AB InBev €200 Million For Restricting Cross-border Sales of Beer

European Commission Fines AB InBev €200 Million For Restricting Cross-border Sales of Beer
May 15
10:21 2019

The European Commission has fined AB InBev €200.4 million for breaching EU antitrust rules. AB InBev, the world’s biggest beer company, has abused its dominant position on the Belgian beer market by hindering cheaper imports of its Jupiler beer from the Netherlands into Belgium.

Margrethe Vestager, Commissioner in charge of competition policy, said: “Consumers in Belgium have been paying more for their favourite beer because of AB InBev’s deliberate strategy to restrict cross border sales between the Netherlands and Belgium. Attempts by dominant companies to carve up the Single Market to maintain high prices are illegal. Therefore we have fined AB InBev €200 million for breaching our antitrust rules.”

Anheuser-Busch InBev NV/SA (AB InBev) is the world’s biggest beer brewer. Its most popular beer brand in Belgium is Jupiler, which represents approximately 40% of the total Belgian beer market in terms of sales volume. AB InBev also sells Jupiler beer in other EU Member States, including the Netherlands and France. In the Netherlands, AB InBev sells Jupiler to retailers and wholesalers at lower prices than in Belgium due to increased competition.

In June 2016, the Commission opened an antitrust investigation to assess whether AB InBev abused its dominant position on the Belgian beer market by hindering imports of its beer from neighbouring countries, in breach of EU antitrust rules. In November 2017, the Commission issued a Statement of Objections.

The decision concludes that AB InBev is dominant on the Belgian beer market. This is based on its constantly high market share, its ability to increase prices independently from other beer manufacturers, the existence of barriers to significant entry and expansion, and the limited countervailing buyer power of retailers given the essential nature of some beer brands sold by AB InBev.

Market dominance is, as such, not illegal under EU antitrust rules. However, dominant companies have a special responsibility not to abuse their market power by restricting competition, either in the market where they are dominant or in separate markets.

AB InBev abused its dominant market position in Belgium by pursuing a deliberate strategy to restrict the possibility for supermarkets and wholesalers to buy Jupiler beer at lower prices in the Netherlands and to import it into Belgium. The overall objective of this strategy was to maintain higher prices in Belgium by limiting imports of less expensive Jupiler beer products from the Netherlands. AB InBev used four different ways to achieve this:

1)   AB InBev changed the packaging of some of its Jupiler beer products supplied to retailers and wholesalers in the Netherlands to make these products harder to sell in Belgium, notably by removing the French version of mandatory information from the label, as well as changing the design and size of beer cans.

2)   AB InBev limited the volumes of Jupiler beer supplied to a wholesaler in the Netherlands, to restrict imports of these products into Belgium.

3)   A number of AB InBev’s products are very important for retailers in Belgium as customers expect to find them on their shelves. AB InBev refused to sell these products to one retailer unless the retailer agreed to limit its imports of less expensive Jupiler beer from the Netherlands to Belgium.

4)   AB InBev made customer promotions for beer offered to a retailer in the Netherlands conditional upon the retailer not offering the same promotions to its customers in Belgium.

On this basis, the Commission concluded that AB InBev abused its dominant position from 9 February 2009 until 31 October 2016 in breach of EU antitrust rules. It deprived European consumers of one of the core benefits of the European Single Market, namely the possibility to have more choice and get a better deal when shopping.

As a result, the Commission decided to impose a fine on AB InBev.

About Author

mike

mike

Related Articles



Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • October 17, 2019Future Food-Tech
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber

Subscribe Here



Advertisements