Anheuser-Busch InBev’s 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.
The European Commission says that AB InBev deliberately restricted supermarkets and wholesalers from buying Jupiler beer at lower prices in the Netherlands and importing it into Belgium: thus maintaining higher prices for consumers in Belgium.
The European Commission opened an antitrust investigation in June 2016, and then issued a statement of objections in November 2017. It has now imposed a €200,409,000 ($225,203,601 USD) fine on AB InBev, for infringement of EU competition rules from 9 February 2009 until 31 October 2016.
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."
Packaging changes
Market dominance is, as such, not illegal under EU antitrust rules. However, the European Commission says that 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".
The Commission says that AB InBev abused its dominant market position in Belgium through a deliberate strategy to restrict supermarkets and wholesalers from buying Jupiler beer at lower prices in the Netherlands and importing it into Belgium.
This was done, it says, in numerous ways: such as by removing the French translation of mandatory information on the label in the Netherlands to make it harder to sell in Belgium.
It also restricted beer sold to a wholesaler in the Netherlands, in order to restrict imports of these products into Belgium; and made customer promotions for beer offered to a retailer in the Netherlands conditional on the retailer not offering the same promotions to its customers in Belgium.
The €200m fine was calculated on a number of factors, including the value of AB InBev’s sales of Jupiler beer in Belgium and the Netherlands; and the gravity of the infringement and its duration.
Fine reduction for cooperation
The Commission notes that AB InBev has cooperated with the Commission beyond its legal obligation to do so, “in particular by expressly acknowledging the facts and the infringement of EU competition rules and by proposing a remedy”.
AB InBev will now provide mandatory food information in both French and Dutch on the packaging of its products for the next five years in Belgium, France and the Netherlands.
The Commission decision has made this remedy legally binding on AB InBev. AB InBev was granted a 15% fine reduction in return for its cooperation.
The €200m fine was calculated on a number of factors, including the value of AB InBev’s sales of Jupiler beer in Belgium and the Netherlands; and the gravity of the infringement and its duration.
A statement from AB InBev confirms it has reached a settlement with the European Commission.
“We appreciate the constructive approach taken by the European Commission throughout this process”, John Blood, General Counsel and Company Secretary of AB InBev said.
“Responsibility and integrity define our culture and we have 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.
“Consumers are at the heart of everything we do. The conclusion of the case allows us to put this behind us and continue to brew high-quality beers that are enjoyed around the world.”
“In relation to this Decision, we made a provision of 230 million USD in our 2018 financials.”