Heineken ‘disappointed’ by €200m cartel loss in last chance EU saloon

20-Dec-2012 - Last updated on 20-Dec-2012 at 12:44 GMT

Heineken yesterday lost its final appeal against a European Commission decision to fine it around €200m ($264.7m) for alleged collusion in an illegal Dutch beer cartel, as the European Court of Justice (ECJ) condemned ‘patently illegal’ behavior in the long-running case.

The European Union Court of Justice (ECJ) rejected Heineken’s appeal – alongside a separate appeal brought by Dutch rival Bavaria – to strike out or reduce the fine, in its judgment on case C-452/11P.

Heineken will not take a hit on its 2012 bottom line, given that it paid the original fine of €219.3m in July 2007. This was subsequently reduced to €198m by the EU General Court last June.

Financial communications manager John-Paul Schuirink sent BeverageDaily.com a statement today that read: "Heineken is disappointed that the European Court of Justice has rejected its arguments in the 1996-1999 Dutch competition case.

“As there is no possibility to further appeal in this case, we have to accept the Court's decision. Heineken fully respects competition laws and is a strong believer in competition and free markets.”

Heineken added that it mandated 100% compliance with applicable competition laws and its own competition law policy wherever it did business, and had implemented a global competition law compliance program for many years.

Co-ordinated price increases

The Commission spent seven years preparing the case – based on alleged cartel activity occurring from 1996 to 1999 – which it took up after Belgium-based InBev Nederland (part of AB InBev) blew the whistle, fining a number of brewers in April 2007.

The Netherlands’ major brewers were implicated in the cartel case, and the EC ruled that they had colluded to co-ordinate prices and price increases, as well as customer allocation across both on- and off-trade distribution channels.

InBev escaped sanction for lifting the lid on the activity, but Koninklijke Grolsch (owned by SAB Miller since 2007), Bavaria and Heineken were not so lucky. The former two were fined €31.7m and €20.7m respectively, although the latter sum was reduced on appeal.

Grolsch managed to escape its fine totally, after the General Court quashed its fine in September 2011, stating that the firm’s direct participation through a ‘legal person’ in the cartel was unproven, and that it should not be held responsible for the actions of its Dutch subsidiary.

‘Very serious’ offenses

In its appeal filed last November, Heineken complained its fine was “particularly large”, that this was due to drawn-out legal proceedings that it claimed were the Commission’s fault, and that June 2011’s 5% reduction was insufficient.

The brewer also claimed that the General Court erred in law by failing to consider comparisons, and apply the ‘principle of equal treatment’ with regard to fines levied, in regard to the Belgian beer case involving Interbrew and Alken-Maes.

But the ECJ said yesterday that the Commission enjoyed wide discretion as regards how it calculated fines for EU competition law violations, and that the Belgian and Dutch cases were not analogous.

“As regards the present case and the role played by the application, it should be noted that the Court, in…the contested judgment, endorsed the consideration of the Commission according to which the species of offense committed should be described as ‘very serious’ in nature and ‘patently illegal.”

Bavaria spokeswoman Inge Van der Heijden was unavailable for comment this morning.

Yesterday’s ECJ judgment is available in French or Dutch here.