Heineken Austria at court: Is the initiative for settlement talks genuine?

Austria | For the first time, Brau Union seems willing to enter into settlement talks in the pending proceedings. A legal representative for Brau Union, Heineken’s fully-owned Austrian subsidiary, said in court on 1 December that the firm wants to “approach the Federal Competition Authority (BWB) and take stock of the situation.” Then a decision could be made as to whether there was a way to reach a “mutually acceptable agreement”. A BWB representative replied that the request will be “discussed internally”. 

Since February there have been seven days of hearings, but the next round of talks could take place behind closed doors.

In antitrust proceedings, settlements are possible. They tend to reduce the fine and shorten the proceedings. The next two hearings are scheduled for March 2026 so January and February could be “put to good use for talks”, Brau Union’s legal representative said. If BWB appears hesitant it is because by the end of December Brau Union needs to sign new contracts with 35 logistics partners to address the BWB's criticisms, media reported. For its part, BWB wants the witness hearings to continue “as soon as possible”.

Observers wondered if the initiative for settlement talks really came at the behest of Brau Union or if it was its legal representative venturing out alone. To engage in settlement talks now would constitute no less than a complete reversal of Brau Union’s legal tactic to date. It will be remembered that Brau Union has always insisted on its innocence and said that the whole affair was “a profound misunderstanding”. Besides, if Brau Union had wanted to settle with the BWB – why wait for 18 months? Court proceedings began in June 2024.

The allegations

In this high-profile court case, BWB accuses Brau Union of having put pressure on distributors to supply its products only and remove non-group products from their ranges. Otherwise, Brau Union would have struck them off its list and distributed directly to their customers. This would have meant a real threat to their businesses. Allegedly, Brau Union also made it more difficult for other breweries to enter the market.

The Heineken subsidiary, which is Austria’s major brewer with a market share in excess of 60 percent, EUR 926 million (USD 1.1 billion) in turnover and EUR 80 million in pre-tax profit (2023), has always denied the allegations.

What the distributors say

So far, four distributors have given testimony. They differ significantly, Der Standard, a newspaper, commented. One distributor from southwestern Styria said he did not experience any pressure or threats. “Brau Union was probably never happy when I sold other beers, but they never threatened to take away my drop shipping business. There were no inventory checks either,” he was quoted as saying in response to questions from the judge.

Another distributor from Salzburg, who has since passed the business on to his son, only mentioned two areas of conflict during his time. At the end of 2020, Brau Union wanted to take over his drop shipping business for a fee, but he successfully resisted and only a few of his customers wanted to be supplied directly by Brau Union. He equally felt pressured into selling more of Brau Union’s non-alcoholic beverages. “I said no and didn't have any problems,” he was quoted as saying. Per Der Standard, both distributors claimed that there had been “no problems with Brau Union”, especially in recent years.

A distributor from Lower Austria begged to differ. According to his testimony, he received “credible threats” from Brau Union’s sales staff, but refused to budge. He said he had been presented with letters and contracts from Brau Union on several occasions. “If I don't sign the letter, my sales partnership will be terminated,” the distributor quoted a Brau Union sales manager as saying. That would have potentially spelled his economic ruin. However, he refused to sign them.
A former, now insolvent distributor, likewise from Lower Austria, took a similar stance in June. He spoke very emotionally about how he felt “great economic pressure” from Brau Union, including threats to cancel drop shipping routes and to supply his new customers directly. He recalled that a Brau Union sales manager checked out his warehouse as a matter of course to see how many non-Brau Union products he stocked.

Can Heineken be held responsible?

Another controversial aspect of the proceedings is whether Dutch Heineken has any “controlling influence” over its Austrian subsidiary. This will determine the amount of the fine and whether Heineken is liable for it. During one hearing, company representatives denied this, but an email discovered by the BWB during a search of Brau Union’s premises and presented in court caused a stir. In it, a former company counsel writes that “we are controlled by Heineken”. If found guilty of market power abuses, the fine could be massive. The maximum limit is ten percent of the group's turnover, which is around EUR 36 billion (2023) for Heineken.