Heineken seeks brewers’ pledge on fridge space and ‘dirty tricks’

SOUTH AFRICA – Major rival Heineken on Wednesday hit SABMiller and Anheuser-Busch InBev (AB InBev) with a slew of conditions it wants the Competition Tribunal to impose on the $108bn merger.

An end to “dirty tricks” and better access to fridge and shelf space topped Heineken’s list of demands.

It was the first intervention by the Dutch brewer. Its lawyer, Anthony Norton, said the merging parties had previously been “dismissive of its concerns”.

Norton said dirty tricks included the removal and defacing of competitors’ signage and giving outlets incentives to charge higher than the retail price for SABMiller’s competitors’ products.

Heineken also wanted a 10% guarantee of fridge space allocated to craft brewers open to it because in SA it had about 10% of the market, while the rest was controlled by SABMiller.

Norton pleaded that the tribunal be sensitive to Heineken’s concerns as “in a few years’ time there’s not going to be any other beer companies in this market”.

Lawyers for AB InBev said it had sold off several major brands, including Peroni and Grolsch, thus shrinking its share.

But Heineken contended they were only 1.5% of the local market and the megabrewer would still dominate.

The Competition Commission conceded that it had approved the merger without having sight of the megabrewer’s expansion plans.

Another competitor, Distell, asked that an arrangement the commission brokered for retail outlets to stock 10% of rival products next to SABMiller’s be extended to stadiums when there were no specially sponsored events.

Distell also asked for SABMiller’s stake in it to be sold off sooner than the three years recommended by the commission but it later emerged that AB-Inbev had consented to a sale within months.

The parties were arguing before the tribunal, which has to sign off the commission’s recommendation that the merger be approved — with numerous conditions.

Tribunal chairman Norman Manoim earlier said the merged entity should spell out how long its commitment not to retrench staff would last. That was one of the conditions agreed to before the merger was approved.

June 23, 2016; http://www.bdlive.co.za/business/retail/2016/06/23/heineken-seeks-brewers-pledge-on-fridge-space-and-dirty-tricks

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