FDBusiness.com

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

 Breaking News
  • C&C Group Increases Revenue by 187.3% to over €1.5 Billion C&C Group, the UK and Ireland drinks production and distribution business, increased net revenue by 187.3% to €1.575 billion in 12 months ended 28 February 2019, reflecting the acquisition of Matthew Clark and Bibendum from the administrators of Conviviality Group in April 2018. Excluding Matthew Clark and Bibendum, and on a constant currency basis, net [...]...
  • 2 Sisters Accelerates Business Transformation 2 Sisters Food Group has announced a series of actions as part of its accelerating transformational strategy to turnaround the business. The company is making further investments in its UK Poultry and Fox’s Biscuits businesses, and is proposing to reduce the number of its UK Poultry sites in order to produce shorter, more efficient supply [...]...
  • Morrisons to Introduce Plastic-free Fruit and Veg Areas to Help Customers Buy Bagless Morrisons is to become the first British supermarket to roll-out plastic free fruit and veg areas in many of its stores. Customers will be able to choose from up to 127 varieties of fruit and veg – and buy them loose or put them in recyclable paper bags. The move follows a ten-month trial in three [...]...
  • Continued Growth by Marston’s Marston’s, a leading British pub operator and independent brewer, has reported a 4.7% rise in underlying revenue to £553.1 million for the 26 weeks ended 30 March 2019, reflecting strong growth in its brewing business, the contribution from new openings and pub acquisitions and positive like-for-like sales in its pub businesses. Underlying operating profit at [...]...
  • UK Ethical Food and Drinks Sales Hit £8.2 Billion British consumers are increasingly eating with a conscience as latest research from Mintel reveals that last year the nation spent £8.2 billion on ethical food and drink, including organic, Fairtrade, Rainforest Alliance and Marine Stewardship Council (MSC) certified products. Over the past five years, sales of ethical food and drink have shot up by 43% [...]...

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

  • June 18, 2019Multimodal 2019
  • June 25, 2019BevExpo 2019
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber

Subscribe Here



Advertisements