EU Competition Commission fines AB InBev €200m for impeding cross-border trade

The European Competition Commission has levied a fine of €200 million on Anheuser-Busch InBev in its Belgian home market for abusing its dominant market position to keep price of its popular Jupiler beer brand high.

Margrethe Vestager, EU competition commissioner, 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 €200m for breaching our antitrust rules.”

AB InBev has 50% share of the Belgian beer market. Jupiler which is AB InBev’s most popular beer brand in Belgium represents 40% of total Belgian beer sold domestically by volume, according to the EU Commission.

The commission accused the brewer of creating artificial barriers to entry for the same Jupiler brand it sells at cheaper prices in neigbouring countries.

In its investigation, the EU Commission found that Jupiler was sold cheaper in the Netherlands and that the beer maker ran afoul of EU Anti-Trust laws by creating significant barriers for Dutch wholesalers and retailers to export or sell the brand in Belgium.

AB InBev impeded cross-border import into Belgium from the Netherlands through contractual restrictions and by removing French labeling for Jupiler beer bound for the Netherlands so as to prevent it from being re-imported into Belgium, where packaging must have both Belgian and French languages.

According to the commission, the restrictions were in place from February 2009 until October 2016 and “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”, the commission said.

The fine was reduced by 15% because the brewer cooperated with the commission. AB InBev has promised for the next five years to print packaging in both French and Dutch for all its products sold in Belgium, France and the Netherlands.

The probe which was first launched in 2016 also investigated allegations of potential restrictions on the company’s Leffe beer brand and imports from France as outlined in November 2017. However, these concerns were excluded from Monday’s decision.

In a statement, AB InBev said: “We appreciate the constructive approach taken by the European Commission throughout this process”, said John Blood, general counsel of AB InBev. He added the company “reinforced our compliance programme based on the learnings of this case. We have already been putting in place the appropriate measures as part of the remedy agreed with the Commission”.

AB InBev set aside $230 million in its 2018 financial results to cover the fine. The company had revenue of $54.6bn in 2018, $50.1bn of which came from beer.



Source: products

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