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The European Commission (“EC”) has fined Belgian beer company Anheuser-Busch InBev, (AB InBev) more than EUR 200 million for restricting cross-border sales between the Netherlands and Belgium.

AB InBev is the world’s largest beer company. According to the EC, AB InBev has a global market share of 25% in the beer industry and holds a dominant position on the Belgian beer market, where its Jupiler beer’s market share exceeds 40%. However, in France and the Netherlands AB InBev must sell the same product at lower prices to its distributors, since it faces stronger competition in these markets.

In June 2016, the EC opened an investigation on its own initiative to determine if AB InBev was abusing its dominant position by limiting exports in the Belgian market. After a three-year investigation, the EC concluded that, between February 2009 and October 2016, AB InBev restricted cross-border sales hindering Belgian supermarkets and distributors from buying cheaper beer from the Netherlands. AB InBev did so by:

  1. Changing the packaging of some of its Jupiler beer products supplied to its distributors in the Netherlands to make them harder to sell in Belgium. In particular, by removing the French labels and changing the design and size of beer cans.
  • Limiting the volume of Jupiler beer supplied to wholesalers in the Netherlands to restrict imports of these products into Belgium.
  • Refusing to sell certain products to retailers unless they expressly accepted to limit imports of cheaper Jupiler beer from the Netherlands to Belgium.
  • Offering promotions to a retailer in the Netherlands only if it did not offer the same discounts to its Belgian customers.

According to the EC, these practices qualify as an abuse of dominant position, but they would remain anticompetitive practices even if they resulted from an agreement between independent companies. According to Margrethe Verstager, Commissioner for Competition, “Consumers in Belgium have been paying more for their favorite beer because of AB InBev’s deliberate strategy to restrict cross border sales between the Netherlands and Belgium.

In exchange for AB InBev’s cooperation, which has been relevant for the outcome of the case, the EC reduced the fine by 15%. AB InBev acknowledged its anticompetitive behavior and suggested a remedy. It has committed to label its products sold in Belgium, France and the Netherlands both in French and Dutch, thus facilitating imports into Belgium from these neighboring countries.

The outcome of the case shows that the EC focuses on anticompetitive practices regarding cross-border sales and that these practices are a priority in the EU agenda. Cases like Schweppes in Spain (discussed in our blog in 2017) evidence that the EC is not the only authority monitoring cross-border sales. Therefore, consumer good producers should be cautious in any aspects of their commercial policy regarding cross-border sales, namely distribution agreements and labeling.

The EC press release is available here.

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joaquim.candel@cuatrecasas.com

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beatriz.garciaquiroga@cuatrecasas.com