On 13 May 2019 the European Commission fined AB InBev EUR 200 million for abusing its dominant position in the beer market by restricting cross-border sales of its products.
Background AB InBev is the world's biggest beer brewer. Its 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 Commission's finding: abuse of dominance In its final decision on 13 May 2019, the Commission came to the conclusion that AB InBev had abused its dominant position in Belgium to restrict cross-border sales of its beer from France and the Netherlands to Belgium in order to maintain a higher price level on the Belgian market.
According to the Commission's findings, AB InBev restricted cross-border sales in four different ways:
- It removed the French version of mandatory information from the label of beer products sold in the Netherlands and changed the design and size of beer cans.
- It limited the volume of sales of Jupiler beer supplied to a wholesaler in the Netherlands.
- It refused to sell a number of its "must stock" items to a retailer in Belgium unless this retailer limited its imports of Jupiler beer from the Netherlands.
- It made customer promotions offered to a retailer in the Netherlands conditional upon this retailer not offering the same promotions to its customers in Belgium.
The decision finds that the four abovementioned practices used by AB InBev infringed Article 102 of the Treaty which prohibits the abuse of a dominant market position.
According to the Commission the infringement lasted from 2009 until 2016.
The Commission imposed a fine of EUR 200,409,000.
The reduction in fine: reward for cooperation in a non-cartel case This fine comprises a 15 % reduction, which has been granted for AB InBev's extensive cooperation during the investigations. The brewer had acknowledged the facts and the infringement of EU competition rules.
Moreover, AB InBev proposed a remedy: the company will provide mandatory food information in both French and Dutch on all existing and new products in Belgium, France and the Netherlands for the next five years. This remedy was declared legally binding in the Commission's decision.
The AB InBev case is an example of the Commission's relatively new approach to grant a reduction in fines in return for cooperation in vertical cases. On 19 March 2019, the Commission launched a new eLeniency tool on its website which can also be used for cooperation in non-cartel cases.
Other non-cartel cases in which the Commission has already granted a reduction in fines are the ARA Foreclosure case (2016, foreclosure of the market for the management of household packaging waste, reduction in fine: 30 %), the cases Philips, Pioneer, ASUS and Denon & Marantz (2018, price-fixing in e-commerce, reduction in fine: 40 – 50 %), the Guess case (2018, cross-border sales restrictions, reduction in fine: 50%) and the Nike case (2019, cross-border sales restrictions, reduction in fine: 40%).
Cross-border sales restrictions: a hot topic for compliance It is already common sense that agreements with resellers aiming at the restriction of imports within the Single Market may constitute an infringement of Article 101 of the Treaty which prohibits anticompetitive agreements and concerted practices.
Today’s decision marks a new development in that companies holding a dominant market position may be held liable under the prohibition of abuse of dominance if they restrict cross-border sales even by unilateral measures such as the removal of certain language versions of mandatory food information or the design and size of products to restrain cross-border sales.
Hence, manufacturing companies (especially from the FMCG sector) are well advised to double-check whether they apply any unilateral measures which might hinder cross-border sales of their products if they are likely to hold a dominant market position. The full version of the Commission's decision is expected to be published in the course of the next weeks or months.