INDIA – The Competition Commission of India has imposed penalties totaling over Rs 873 crore (US$117.5m) on major brewing companies in the country for what it termed as cartelisation in the sale and supply of beer. 

The list of companies that were found to be in contravention of the law include United Breweries Ltd, Carlsberg India, and SABMiller India Ltd, now renamed as Anheuser Busch InBev India Ltd (AB InBev).  

All India Brewers’ Association (AIBA) was also found to be actively involved in facilitating such cartelisation. 

Following the ruling, the CCI chose to give the three companies a benefit of reduction in penalty.  100 per cent to AB InBev and its individuals, 40 per cent to UBL and its individuals and 20 per cent to CIPL and its individuals. 

With the reductions, UBL will now be required to pay nearly Rs752 crore (US$101.2m) while Carlsberg India will chuck out Rs 121 crore (US$16.2m) to settle its fine.  

A fine of over Rs 6.25 lakh (US$8,400) has been imposed on AIBA and other individuals who were found guilty of the offense. 

The period of cartelisation was considered to be from 2009 to at least October 10, 2018, with CIPL joining in from 2012 and AIBA serving as a platform for facilitating such cartelisation since 2013.  

As per the release, October 10, 2018, was the date on which the Director General (DG) conducted search and seizure operations at the premises of the beer companies. 

For United Breweries the fine is a significant sentiment dampener, and it may have to raise debt to pay the fine, said brokerage firms. 
“UBL had cash and cash equivalents of ₹470 crore at the end of FY21. As per our current forecasts, it may have the net cash to pay the penalty of ₹752 crore by end of FY22, or else it may have to raise debt,” Motilal Oswal said in an investor report.  

UBL which is majority owned by Heineken Breweries said in a stock exchange that it is reviewing the order in consultation with its legal advisers. 

Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro industry. SUBSCRIBE HERE