BBC News: Dutch brewers fined over cartel (*Is this a national sport? see Royal Dutch Shell price fixing cartels)

Dutch brewers including Heineken and Grolsch have been fined a total of 273.7m euros (£185m) by European regulators for price fixing.

The European Commission has penalised Heineken, Grolsch and Bavaria for stifling competition by sharing pricing policy and levels.

The move follows a lengthy inquiry by Brussels into sales of beer to Dutch bars and restaurants in the late 1990s.

Heineken is to appeal against its 219m euros fine, calling it “excessive”.

The fine is the seventh-largest competition penalty ever handed out by the EU and its scale reflects the fact that Heineken accounts for more than half of beer sales in the country.

‘Covering tracks’

Grolsch has been fined 31.7m euros, while Bavaria will have to pay 22.9m euros.

InBev, the owner of Stella Artois which was also accused of violating EU laws, escaped a fine after providing key information about the infractions.

Competition Commissioner Neelie Kroes said the brewers had “carved up” the market between them, adding that such behaviour was “unacceptable”.

She said that board members and senior executives at the companies concerned had either participated or been aware of the actions and done nothing to stop them.

“The highest management of these companies knew very well that their behaviour was illegal but they went ahead anyway and tried to cover their tracks,” she said.

Heineken said it was “highly surprised” by the decision and would appeal.

“Heineken finds the fine excessive and unjustified,” it said in a statement.

Grolsch said it was “amazed” by the decision and said it would also be launching an appeal.

Compensation?

The Commission said individual consumers may now seek compensation against the firms concerned in the Dutch courts.

A trade association representing Dutch hotels and restaurants said it would seek financial redress in the form of discounts on future beer purchases and possibly compensation.

LEVEL OF FINES
Heineken: 219m euros
Grolsch: 31.7m euros
Bavaria: 22.9m euros 

The Commission has already taken action against brewers in Belgium, France and Luxembourg for similar offences.

It formally accused the three brewers and smaller firm Bavaria of unfair trading practices in 2005, having launched its investigation several years earlier.

They were alleged to have co-operated in setting the price of beer sales to licensed premises in the Netherlands, keeping prices artificially high.

The Netherlands is one of Europe’s largest beer-drinking markets although sales have fallen in recent years as older consumers tend to favour wine.

Reports suggest that Commissioners decided some time ago to penalise the companies and were merely deliberating over the scale of fines appropriate in the case.

InBev is the world’s largest brewer in terms of sales volumes, producing the likes of Beck’s, Hoegarden and Bass.

Ms Kroes has made the fight against price fixing and other competition violations one of her main priorities.

Brussels has already issued fines totalling 1.7bn euros against firms this year in cartel cases.

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/1/hi/business/6566827.stm

Published: 2007/04/18 09:41:08 GMT

*Related articles about Royal Dutch Shell’s record as a repeat offender in organising illegal price fixing cartels

http://news.bbc.co.uk/1/hi/business/5343378.stm

http://royaldutchshellplc.com/2006/09/14/daily-mail-shell-fined-%c2%a373m-over-price-fixing/

© BBC MMVII

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