Short Reads

Cheaper beer ahead? AB InBev fined for cross-border sales restrictions

Cheaper beer ahead? AB InBev fined for cross-border sales restrictions

Cheaper beer ahead? AB InBev fined for cross-border sales restrictions

06.06.2019 NL law

Dominant companies beware of hindering cross-border sales between resellers through, for instance, labelling or packaging measures to make your products less attractive for import.

The European Commission recently imposed a EUR 200 million fine on AB InBev, the world's largest beer company, for abusing its dominant position in the Belgian beer market by hindering cheaper imports of Jupiler, the company's most popular beer brand, from the Netherlands into Belgium. The fine may result in more cross-border sales, as multinational retailers in particular may take it as a cue to begin sourcing more products from the cheapest EU Member States.

According to the Commission's press release, (the Commission decision is not public yet), AB InBev is dominant in the Belgian beer market due to the company's consistently high market share and 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 as a result of the essential nature of certain beer brands sold by AB InBev.

AB InBev abused its dominant position by restricting the possibility for supermarkets and wholesalers to buy cheaper Jupiler beer in the Netherlands and subsequently 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.

According to the Commission, AB InBev achieved this by:

  1. changing the packaging of some of its Jupiler beer products supplied to Dutch retailers and wholesalers to make it harder for them to sell in Belgium, particularly by removing the French version of mandatory information from the label, as well as changing the design and size of beer cans.
  2. limiting the volumes of Jupiler beer supplied to a Dutch wholesaler to restrict imports of these products into Belgium.
  3. refusing 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. making customer promotions for beer offered to Dutch retailers conditional upon the retailer not offering the same promotions to its Belgian customers.

Since AB InBev cooperated beyond its legal obligation to do so (including proposing a remedy), the Commission granted a 15% reduction under its non-cartel cooperation procedure. The remedy will ensure that the packaging of all existing and new products in Belgium, France and the Netherlands will include mandatory food information in both Dutch and French for the coming 5 years.

In light of this decision, dominant companies should review their conduct towards resellers, including the imposition of labelling or packaging measures, to assess whether cross-border sales may be restricted. In addition, they should be aware of a likely increase in cross-border sales, since multinational retailers may take the fine as a cue to source more products from the cheapest EU Member States.

 

This article was published in the Competition Law Newsletter of June 2019. Other articles in this newsletter:

 

 

Team

Related news

05.04.2022 NL law
Game on for gatekeepers: Digital Markets Act finalised

Short Reads - Now that political agreement has been reached on the final text, the Digital Markets Act (DMA) will enter into force soon. The DMA’s ex ante rules and obligations will apply next to the ad hoc EU and national competition rules. Time for big digital companies to take stock of the potential implications of these additional rules on their day-to-day business operations. See our infographic for a concise overview of the DMA.

Read more

04.04.2022 EU law
ACM jumps on gun-jumping bandwagon

Short Reads - Companies involved in multi-step acquisitions should beware of potential gun-jumping risks. The Dutch Authority for Consumers and Markets (ACM) has fined a trade association for failing to notify the acquisition of four pharmacies involving a consecutive partial resale. Unlike the European Commission’s gun-jumping fine for partial implementation of a concentration through a ‘warehousing’ two-step acquisition (see our July 2019 newsletter; appeal pending), the ACM’s fine relates to faulty turnover calculations due to an unmaterialized two-step transaction.

Read more

04.04.2022 EU law
The ECN+ Directive implemented in Belgium and introduction of merger filing fees

Short Reads - On 7 March 2022, the Act implementing the ECN+ Directive into Belgian law was published in the Belgian Official Gazette. The Act entered into force on 17 March 2022. Some of the key amendments include (i) the introduction of filing fees for the notification of a concentration, (ii) new fines and penalty payments (including clarifications on the leniency programme), (iii) new dawn raid powers and (iv) the introduction of a regulatory framework for mutual assistance and cooperation within the European Competition Network.

Read more