EU fines AB InBev 200 million euros

AB InBev fined for 200 million

The European Commission has fined AB InBev 200 million euros because the brewery group has been abusing its dominance in the Belgian beer market, forcing consumers to pay too much for its flagship beer Jupiler between 2009 and 2016.

 

40 % market share

In terms of turnover, Jupiler has an impressive 40 % market share in Belgium, but in the Netherlands and France that share is much smaller. As a result, AB InBev charges less in those countries. In itself, that is allowed, so long as the free movement of goods is not compromised. In other words, Belgian retailers should be able to import (cheaper) beer from the Netherlands or France.

 

It is precisely in this area where AB InBev overstepped its bounds according to the Commission's judgment: European Commissioner for Competition, Margrethe Vestager, said that the Belgian consumer was forced to pay more for his beer because AB InBev used a deliberate strategy of limiting sales across the borders between Belgium and the Netherlands.

 

No bilingual labels

Among other tactics, AB InBev supplied the beer in the Netherlands and France with monolingual labels, avoiding import into Belgium, where bilingual labels are mandatory. The brewery group also limited deliveries to foreign wholesalers, so as to reduce the amount of beer that was exported back to Belgium. Dutch traders who refused to limit the export of cheaper beer to Belgium had their supplies from AB InBev cut off. A supermarket chain that is active in both Belgium and the Netherlands received a discount, provided the discount did not benefit Belgian customers.

 

AB InBev has since admitted to the allegations and promised to take measures. Because of that, the 200 million-euro fine is somewhat lower than expected. The company had already made a provision of 230 million dollars (200 million euros) earlier on.

 

'Satisfied, but not enough'

Dominique Michel from Belgian trade federation Comeos applauds the Commission's decision, but emphasises this is not an isolated case. "This does not only happen in beer. In other international brand products, Belgian traders can often not stock up in countries where those products are cheaper, which ultimately leads to higher prices for the consumers. The next European Commission should make sure that dealers, just like consumers, can buy in the country of their choice."

 

EuroCommerce also responds favourably, calling it "a very welcome outcome on an issue which we have been raising as a problem for many years." Like Comeos, the European trade organisation calls for further action: "[because of Territorial Supply Constraints] retailers and wholesalers are unable to source centrally and distribute goods across their networks from one EU country to another, or offer to sell online to customers in another EU country." According to EuroCommerce, that causes unfair competition, because "retailers cannot access the full range offered by the supplier, while increasingly manufacturers are selling their whole range to consumers directly online."