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Dominant AB InBev fined EUR 200 million by European Commission for hindering cross-border sales of beer over nearly 8-year period

16 May 2019
Commercial Law
Monday's decision brings to an end an investigation the EC had opened back in June 2016 to formally investigate its suspicion that AB InBev was actively hindering cross-border sales of its most popular beer brand, Jupiler, from the neighbouring Holland and France into Belgium.

Dominant AB InBev fined EUR 200 million by European Commission for hindering cross-border sales of beer over nearly 8-year period

Monday's decision brings to an end an investigation the EC had opened back in June 2016 to formally investigate its suspicion that AB InBev was actively hindering cross-border sales of its most popular beer brand, Jupiler, from the neighbouring Holland and France into Belgium. The fine takes into account a 15% reduction that AB InBev earned for cooperating with the Commission and for 'acknowledging the facts and the infringement of EU competition rules'; namely that AB InBev:

  1. removed the French version of the product labels to make the products harder to sell in Belgium;
  2. limited supplies to a Dutch wholesaler , to restrict on-sales to Belgium;
  3. refused to sell 'must-stock' products to a Dutch retailer unless the retailer agreed to limit its sales to Belgium; and 
  4. made customer promotions in Holland conditional upon the retailer not offering the same promotions to its customers in Belgium.

The Commission concluded that these practices breached Article 102 of the Treaty on the Functioning of the European Union (TFEU) as they were intended to artificially maintain national borders within the Single Market and thereby to restrict competition.

The impact of this decision

With its decision the Commission has sent a strong message to powerful suppliers of goods that would seek to partition national markets, even by more subtle means.  This will probably be welcomed especially by retailers.  It demonstrates as sacrosanct the principle that goods should be free to move between national jurisdictions and suppliers with market power in particular must not in principle engage in strategies to limit this (NB. it would normally be assumed that suppliers with less market power will have more incentive to maximise volume of sales by whatever means and so be less tempted to consider this).  

By its very design, advancing the further integration of the internal market is one of the key objectives of EU competition law. This new decision is of special note because the Commission chose to base its enforcement action on Article 102 (abuse of dominance) and not on Article 101 (restrictive agreements).  The latter would have required the Commission to prove some sort of 'agreement' between the different actors (who are requesting and agreeing to limit parallel trade). By opting for Article 102 the Commission managed to avoid the kind of controversies it painfully experienced back in 2004, when its Adalat decision was overturned by the Court of Justice (Joined Cases C-2/01 P and C-3/01 P Bundesverband der Arzneimittel-Importeure eV and Commission of the European Communities v Bayer AG). 

In that case, the Court took into account the reluctance of Bayer's trading partners to partake in the suppression of parallel trade across national borders and concluded that the Commission had 'not proved the existence of an express or tacit acquiescence by the wholesalers in the attitude adopted by the manufacturer'.

Actions under Article 102 to preserve parallel trade are still the exception because they rely on establishing dominance to begin with (ie. an ability to behave to an appreciable extent independently from one's customers and competitors).  They also raise fundamental questions about (dominant) companies' freedom to adjust their commercial strategies to different market realities.  As Advocate General Jacobs cautioned already in the 2004 GlaxoSmithkline Aeve case (C-53/03 Synetairismos Farmakopoion Aitolias & Akarnanias (Syfait) and Others), an abuse can be found 'only after a close scrutiny of the factual and economic context, and even then only within some-what narrow limits.'

Would the Commission have met the threshold for finding abuse without AB InBev's cooperation?

It is difficult to tell whether the Commission would have been able to meet the threshold for finding abuse had it not been for AB InBev's 'acknowledging the facts and the infringement of EU competition rules'. It might well be that the mere removal of dual-language product labelling on its own would not have been sufficient to justify the abuse allegation. After all, the Commission's decision cannot mean that products sold in the EU now have to be labelled in all Member States' official languages. Similarly, supplying a national distributor or wholesaler just enough volumes to serve its local market would seem difficult to consider abusive per se – given that efficiencies and the need to ensure effective regional coverage might dictate just that.  It is therefore likely that the Commission considered these practices as part of a more comprehensive strategy where only the cumulative effects of these different practices established the abuse. Nevertheless, the conditioning of commercial incentives and the use of 'must-stock' products as leverage to coerce a market partitioning scheme might reasonably have been expected to raise questions in the absence of legitimate justifications.  The fundamental principle of not using restrictions (or for that matter market power) to impede trade in goods between Member States is not a new concept.

Is this a new era for antitrust enforcement?

It remains to be seen whether this case really heralds a new dawn in antitrust enforcement.  However companies with market power operating in the EU should in any event take note that the Commission is prepared to attack if they are seen as exploiting, let alone arguably abusing, their strong position in order to manipulate disparities that still exist across the Single Market.  Dominant companies should in particular ask themselves if there is a legitimate business objective for undertaking particular strategies that are capable of hindering trade in goods between different national markets.  In the absence of such objective reasons there may be a considerable risk of an antitrust investigation and fines (plus damages actions from third parties showing harm caused by the infringement(s)). 

Read the Commission's press release here >


If you have any questions on the issues discussed, please contact Christian Peeters or Jonathan Branton.

Further Reading

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