Heineken subsidiary fined for anti-competitive practices
Are Greek bureaucrats sitting on their hands? Two years ago, the Competition Commission concluded its investigation into anti-competitive practices in the country’s beer market, yet failed to publish it, critics say. Probably after some prodding, on 2 December 2015 the watchdog eventually imposed a EUR 31.5 million (USD 33.5 million) fine on the country’s major beer producer Athenian Brewery, a Heineken subsidiary, for unfair market practices.
Local media cheered that the Competition Commission finally did the job it’s supposed to do, as in the past the watchdog tended to behave like a lap dog rather than like a bulldog.
In any case, the independent authority found that Athenian Brewery had abused its dominant position by applying anti-competitive practices in all distribution channels (wholesale, supermarket and foodservice).
The audit covers the years 1998 to 2013. The case file, not including electronic documents, is approximately 8,000 pages.
Media say that Athenian Brewery granted its partners significant financial and other compensations in exchange for exclusivity. Incidentally, these compensations, sometimes amounting to twice the turnover, were not mentioned in the written contracts. The financial rewards were often personalized and supplied sometimes in advance, and there were threats and punitive behaviour in case of breach of the agreed.
In addition to the fine, the Competition Commission ordered the company to omit actions of a similar nature in the future and to draw up written contracts.
Athenian Brewery immediately branded the ruling “unfair” and pledged to contest it in court.
“Athenian Brewery categorically denies the Commission’s claims, it considers the decision unfair and baseless and states that it will immediately seek recourse to justice,” it said in a statement.
Athenian Brewery added that, although the Competition Commission’s investigation covered 15 years, it failed to take into account that the Greek beer market has expanded from five players in 2000 to over 25 in 2014.
“[Our company’s] market share fell from 73 percent in 2000 to around 50 percent today. These facts prove in the clearest manner that the Greek beer market is free and open to competition,” it said.
Athenian Brewery witnessed a marginal increase in its share in 2014 due to the healthy growth of its Alfa brand, yet its flagship brands, Heineken and Amstel, continued to record declines in sales, says Euromonitor.
The merger between Carlsberg-owned Olympic and Mythos breweries, which was completed in November 2014, also brought significant changes to the competitive landscape. The merger resulted in the new company claiming a total volume share of 27 percent in 2014. This has led to competition hotting up.
One of Athenian Brewery’s main competitors, Macedonian Thrace Brewery in northern Greece, only in November 2015 noted that the Greek market was still dominated by Heineken and Carlsberg “to the detriment of locally owned breweries, new entrants and ultimately the Greek consumer.”
Greek brewers produced about 3.8 million hl beer in 2014.
