Austria: Heineken’s Austrian subsidiary facing fine for alleged market abuse

The Austrian Federal Competition Authority (BWB) has proposed imposing a significant fine on Brau Union for alleged market abuse and cartel violations, InsideBeer reported on June 18.

Brau Union is Austria's largest brewery group and owned by Amsterdam-based Heineken since 2003. The BWB's investigation revealed several infractions, including exclusive purchasing commitments, brand restrictions, bundling practices, market and customer segmentation, and strategic data sharing about competitors, which aimed to hinder rival beer producers and eliminate existing beverage distributors from the market.

According to the BWB, these actions were designed to restrict the sales opportunities and market entry of competing beer producers while driving current beverage distributors out of the market.

The investigations became public knowledge two years ago in June when it was revealed that raids had been conducted at the breweries. The BWB and Brau Union confirmed the raids at the time, although the company denied the allegations. The raids were prompted by whistleblower reports suggesting Brau Union pressured regional beverage suppliers to exclusively purchase not only beer but also wine, non-alcoholic beverages, and spirits from them. The brewery allegedly threatened to distribute beer directly if suppliers, fearing revenue losses, refused.

In response, Brau Union contested the allegations, stating they had provided comprehensive written responses to the BWB and were taken aback by the ongoing violation claims, citing a lack of specific guidance from the BWB for necessary measures. They believe that the BWB's concerns stem from a fundamental misunderstanding of their cooperation with distribution and logistics partners. Brau Union expressed confidence in the Austrian Cartel Court's ability to adjudicate the matter fairly.

The potential fine, if upheld by the court, could amount to up to 10% of Heineken's annual global turnover, which recently stood at a staggering EUR 36 billion.

In a related case, the European Commission imposed a EUR 200 million fine on AB InBev in 2019 for similar anti-competitive practices. The Commission found that AB InBev had abused its dominant position by restricting cheaper imports of its Jupiler beer from the Netherlands and France into Belgium.

25 June, 2024