Stamping out nefarious practices
For more than ten years, Austria's biggest brewers refused to supply independent wholesalers with draught beer. An Austrian court, in early March 2012, decided that this was unlawful and moreover reeked of price fixing – despite the brewers' claims that hygiene and beer quality would have been at risk had the brewers not supplied the publicans directly.
The court would have none of this and sentenced the brewers Ottakringer, Stiegl and Brau Union to EUR 1.1 million in fines. Heineken-owned Brau Union is to pay EUR 750.000, Ottakringer EUR 190.000 and Stiegl EUR 140.000.
It's consoling to see that some are willing to stop the rot and even do something about it.
Well, in this case, the court got some help from a whistleblower, who was revealed by the Austrian media to be Brau Union. It's more than a juicy tidbit that Brau Union happens to be Austria's major brewer with brands like Zipfer, Gösser and Kaiser and a market share of 50 percent. It would have benefitted most from the brewers' gentlemen agreement.
As a consequence of the court's investigation, the General Director of Brau Union, Markus Liebl, allegedly had to resign from his post as chief of the Austrian Brewers' Association in June 2011. His resignation had been voluntary, Brau Union said at the time and quoted additional tasks at Heineken for Mr Liebl. He has since been succeeded by Sigi Merz, who heads Ottakringer brewery.
Brau Union made headlines again at the end of March 2012, when eleven former shareholders were tried for insider trading in the run-up to the brewer's sale to Heineken in 2003.
Heineken made its largest acquisition to date in 2003 when in May that year it added Brau-Beteiligungs AG (BBAG) to its arsenal. The expensive EUR 1.9 billion/USD 2.13 billion deal strengthened Heineken's foothold in Europe and also gave it an edge in Austria, Romania, Hungary, Poland, and the Czech Republic.
As early as November 2002 there was a persistent rumour that the listed BBAG would be taken over. Trading in BBAG's shares soared as did BBAG's share price. Those who had bought BBAG's shares early would have made a killing.
BBAG had been formed by local "beer barons" putting their fiefdoms together. At the time of the sale it controlled over 50 percent of the Austrian beer market.
After five days of court proceedings, on 23 April 2012 three of the accused were sentenced to pay fines totalling EUR 108,000, eight were acquitted. Both the prosecution and the defendants decided to appeal.
Everyone knows that the mills of justice grind slowly. But how much slower than this can it get?
