High fines in beer cartel not upheld

Monday, 7 November 2011

The European Commission (‘Commission’) has fined the Dutch beer breweries Heineken, Bavaria and Grolsch in 2007 because of their involvement in a cartel on the Dutch beer market. The total amount of fines for these companies amounted EUR 273 million. The Court of First Instance (‘Court’) now judged this fine. This resulted in a reduction of the fines for Heineken and Bavaria. The fine imposed on Grolsch has been completely annulled. 

History

The four largest beer breweries (InBev, Heineken, Bavaria and Grolsch) of the Netherlands were involved in an alleged cartel concerning the Dutch beer market in the period 27 February 1996 until 3 November 1999. InBev filed for leniency regarding this infringement in 2000. After the start of the Commission investigation in 1999 InBev provided evidence to the Commission regarding the existence of the alleged cartel. For this cooperation InBev received full immunity for its fine.

In the opinion of the Commission the cartel consisted out of several multilateral, non-official meetings of the four largest players on the beer market, during the relevant period mentioned above. Some additional bilateral meetings also took place during which the same breweries took part in alternating combinations. During these meetings also prices and price increases were coordinated for the catering as well as the home consumers segment. In addition the commercial conditions for individual buyers were coordinated and consultation about the division of purchasers took place. The Commission based its evidence for these infringements mainly on the leniency statements of InBev. In addition it used internal documents of the beer breweries. You can think of handwritten notes of meetings, expense statements and copies of agenda’s.

Recent case law

Heineken, Bavaria and Grolsch appealed to the decision of the Commison. The judgements of the Court were published in June [1] and September [2] of this year. For all three beer breweries the appeal procedure was succesfull: the fines of Heineken and Bavaria have been reduced substantially, the fine of Grolsch has been annulled.

Heineken en Bavaria
In appeal Heineken and Bavaria successfully took the position that the Commission exceeded the reasonable period because of the long duration of the administrative procedure. The administrative procedure lasted 85 (!) months in total. The Commission already took this long period into account and reduced the fine with EUR 100,000. The Court however stated that this was not sufficient to correct this long duration adequately. The Court granted a fine reduction of 5%. As a result the initial fine of EUR 22,850,000 million will be reduced to EUR 20,712,375. The initial fine of Heineken initially amounted EUR 219,280,000. After the reduction granted by the Court the fine will be EUR 198,000,000. Despite of the reduction of the fine, both Bavaria and Heineken have appealed against the judgement of the Court.

Grolsch
The Commission imposed a fine of EUR 31,658,000 on Grolsch. Koninklijke Grolsch N.V. was the entity that was held responsible for the infringement. The infringement was however actually committed by it’s subsidiary Grolsche bierbrouwerij Nederland. Grolsch argued that only the employees of Grolsche bierbrouwerij Nederland attended the meetings. The decision of the Commission was however only addressed to Konklijke Grolsch. The Commission did also not motivate in its decision why it held Koninklijke Grolsch responsible for the behaviour of its subsidiary. It was therefore not possible for the Court to judge this action. As a consequence the Court annulled that part of the decision of the Commission that was addressed to Koninklijke Grolsch. As a result the fine for Grolsch was cancelled.

 

[1] Court of First Instance, 16 June 2011, case T-240/07, Heineken Nederland B.V., Heineken N.V./ Commission and Court of First Instance 16 June 2011, case T-253/07, Bavaria N.V./ Commission.
[2] Court of First Instance 15 September 2011, case T-234/07, Grolsch N.V./ Commission.