AB-InBev fined EUR 200 million for preventing cross border sales

Belgium | It’s a lot of money. The EU Commission has fined AB-InBev the staggering sum of EUR 200 million (USD 223 million) for preventing cheaper beer imports from the Netherlands into Belgium.

The fine was issued on 13 May 2019 after a three-year investigation into the brewer’s most popular brand in Belgium, Jupiler.

Jupiler has a 40 percent market share in Belgium. It is sold at a higher price in Belgium than in the Netherlands. Therefore, Belgian wholesalers and retailers had tried to buy Jupiler in the Netherlands, which AB-InBev sought to prevent through all kinds of practices.

The Commission said AB-InBev’s strategy had included changing the packaging of some Jupiler beer distributed to Dutch retailers and wholesalers, such as removing French language information from labels. This made it hard to sell the beer in Belgium.

The company also restricted the volumes of Jupiler to Dutch wholesalers to prevent imports into Belgium, and refused to sell some of its products to retailers unless they agreed to limit imports of Jupiler beer from the Netherlands to Belgium.

Another anti-competitive tactic was to prevent Dutch retailers from offering customer promotions for beer to their customers in Belgium, the Commission said.

The feisty EU Competition Commissioner Margrethe Vestager commented: “Consumers in Belgium have been paying more for their favourite beer because of AB-InBev’s deliberate strategy to restrict cross border sales between the Netherlands and Belgium.”

The anti-competitive practice took place between February 2009 and October 2016.

AB-InBev had taken a provision of USD 230 million in its 2018 results, released in February this year, which implies they already knew how much they would be fined.

The EU cut the fine by 15 percent after AB-InBev admitted wrongdoing and agreed a remedy. The brewer will provide mandatory food information in both French and Dutch on products for sale in Belgium, France and the Netherlands for the next five years.

The EU likes to portray itself as a staunch defender of competition. In this respect, AB-InBev was lucky to walk away with only EUR 200 million in fines. In March 2019, Europe’s competition chief fined Google EUR 1.49 billion for unfairly favouring some of its online advertising services over those of rivals, bringing the total penalties imposed by Brussels on the American search giant to over EUR 8 billion.