Heineken Austria at the cartel court: Judge blasts watchdog

Austria | Trouble ahead for Heineken. The ECJ’s milestone ruling confirmed that the Dutch firm can be held liable even if it knew nothing about Brau Union’s alleged abuses of market dominance in Austria. On 11 February, the first public hearing was held at the Vienna Cartel Court. Class actions against Heineken can no longer be ruled out.

The Austrian anti-trust watchdog (BWB) accuses Brau Union of having abused its market dominance, but the firm denies any wrongdoing. However, during the first hearing the presiding judge said that she was not happy with the competition authority’s 260-page submission plus 145 pages of supplements because it lacked “clarity”, the Austrian newspaper, Der Standard, reports. She added that the violations were not really evident and instructed the BWB to provide her with a “a clear presentation of the facts”.

The newspaper Die Kleine Zeitung reports that this is the second time the judge has made the competition authority rewrite its submission since June 2024, when the authority took Brau Union to court. While some observers interpreted this as an unduly harsh criticism of the BWB’s investigation, as it could be interpreted to mean that the evidence is flimsy at best, others thought the judge was merely keen to establish that the court is unbiased.

Brau Union enjoys total autonomy

Heineken’s subsidiary Brau Union is the biggest brewer in Austria, with brands including Gösser, Schwechater, Edelweiss, Zipfer, Puntigamer, Wieselburger, Kaiser, Schladminger, and Villacher. Its market share exceeds 60 percent (by volume), but in some regions it is above 80 percent.

The BWB accuses the beer market leader of having abused its market dominance, for example by arm-twisting wholesalers into exclusivity contracts for its beers and other beverages. The company vehemently denies all allegations. During the hearing, Brau Union’s legal team – reportedly - complained that it had not been given full access to the files during the investigation and that the watchdog’s PR has put it in a bad light.

The hearing underlined that the anti-trust body is directing its allegations against Brau Union only. However, should the court issue a fine, Heineken would be affected too, not least when it comes to calculating the total sum. Brau Union’s legal team asserted that Heineken does not exert any “decisive influence” on its wholly-owned subsidiary because Brau Union can act “autonomously”. In light of the ECJ ruling two days later, Brau Union’s legal team may need to change its strategy, observers say.

An important ECJ ruling

On 13 February, the highest EU court, the European Court of Justice, ruled against Heineken in a similar case originally from Greece, saying that all legal entities belonging to the same “economic undertaking” are liable if one of them commits an infringement (whether or not they had any involvement).

This ECJ ruling has broader significance. Should the Austrian Cartel Court find Brau Union guilty and competitors in Austria decide to pursue damages claims against Brau Union, the ECJ decision will facilitate the option of including the parent company Heineken in a joint claim.

Judge prefers out-of-court settlement

According to those present at the two-and-half-hour hearing, quite some time was spent on discussing which of Heineken’s annual revenues would form the basis of a potential fine, which could be as high as 10 percent of total global turnover. For several years now, Heineken’s revenue has been in excess of EUR 30 billion.

Closing the hearing, the judge advised the BWB and Brau Union to negotiate out of court. In so-called commitments, Brau Union could promise to refrain from certain anti-competitive behaviours in the future. Another option for Brau Union is to reach a settlement with the trust buster and bargain for a potentially lower fine, if an alleged violation has actually been committed.

In case the two parties fail to settle, the next full-day court hearing will take place in June.