EU fines AB InBev US$224m over higher beer prices in Belgium

EU – The European Union has fined AB InBev, the world’s largest brewer US$224 million (€200.4 million) for breaching EU antitrust rules by restricting cross-border beer sales.

The maker of Budweiser and Corona has been indicted for abusing its dominance in the Belgian beer market by hindering cheaper imports of its Jupiler beer from the Netherlands into Belgium.

The European Commission has charged the Belgium-headquartered brewer for breaching the EU antitrust rules from February 2009 until October 2016.

AB InBev is said to have the French version of mandatory information from the labelling and changed the design and size of beer cans to make it harder to sell to Belgian consumers.

This made it difficult for supermarkets and wholesalers to buy Jupiler beer at lower prices in the Netherlands and import them into Netherlands.

Deliberate strategy to restrict sales

AB InBev holds more than 50% share of the beer market in Belgium, with Jupiler being the most popular brand in the market, representing around 40% of the total Belgian beer sold domestically by volume.

The commission concluded that its dominance plus a high market share gave it the ability to increase prices and “significant” barriers to entry.

An investigation launched by the EU found out that Jupiler is cheaper in the Netherlands and AB InBev’s restriction prevented wholesalers from selling the beer in the neighbouring Belgium.

“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,” said Margrethe Vestager, EU Competition Commissioner.

“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.”

Launched in 2016, the probe also investigated allegations of potential restrictions on the company’s Leffe beer brand and imports from France.

AB InBev has cooperated with the investigations and committed to print packaging in both French and Dutch for all its products sold in Belgium, France and the Netherlands for the next five years.

“We appreciate the constructive approach taken by the European Commission throughout this process”, said John Blood, general counsel of AB InBev.

“…. 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.”

In the year ending December 2018, AB InBev posted US$54.6 billion in revenues, US$50.1 billion of which was from beer.

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