E-Malt.com News article: The Philippines: Asia Brewery asks court to reverse ruling clearing San Miguel of hoarding its bottles

Asia Brewery, Inc. has asked the Court of Appeals to reverse a ruling that cleared San Miguel Corp. from allegedly hoarding millions of pesos worth of its empty beer bottles and plastic crates, ABS-CBN reported on October, 12.

In a 62-page motion for reconsideration, the firm through lawyer Eduardo Ceniza said the appellate court erred in recognizing SMC’s counterclaim against Asia Brewery.

The appellate court “erred when it relied on the so-called 'swapping agreement' to justify San Miguel's illegal trade practices consisting of the intentional withdrawal and hoarding of a huge number of Asia Brewery's beer bottles and cases to disrupt the latter's production and distribution system...,” the firm said.

The issue stemmed from a verbal swapping agreement between the 2 firms in 1990. The agreement basically states that 1 would be able to recover its bottles that were mistakenly retrieved by the other party in the normal course of trade.

The agreement was put into effect in 1990, 1991 and parts of 1992.

Asia Brewery said it decided to terminate the agreement after noticing the unusually large volume of bottles that SMC was tendering to it supposedly under the swapping agreement.

The firm claimed SMC deliberately retrieved its bottles and shells to limit its trade cycle. It alleged SMC used the agreement as a ploy to disguise unfair trade practices.

“But long after the termination of the swapping agreement, SMC deliberately continued retrieving and storing Asia Brewery bottles and shells in its plants and warehouses for the malicious purpose of reducing the number of Asia Brewery bottles and shells in circulation…,” it said.

An aerial surveillance it implemented showed that its allegations can be proven. It claimed, for example, that a raid of SMC's three warehouses in 1997 yielded over 1.6 million bottles of Beer na Beer, Carslberg, Manila Beer, Colt 45, Lone Star and Budweiser in various sizes, some of which were still unopened.

It also found 130,000 plastic crates—even if the retrieval of crates was not discussed in the swapping agreement. Asia Brewery said SMC painted over the shells to make it look like the latter’s.

In 2008, a Marikina Regional Trial Court ruled in favor of Asia Brewery. Judge Alice Gutierrez of Branch 263 ordered SMC to pay P130-million in damages.

The appellate court, however, reversed the ruling.

The CA said the beer products found in the SMC plants were mere leftovers when Asia Brewery terminated the swapping agreement.

It also said SMC’s top management was not aware of the alleged illegal activities of its salesmen in the field.

Thus, it ordered Asia Brewery to pay its rival P116 million in damages over the supposed unfounded allegations.

In its appeal, Asia Brewery said only the “hopelessly naive and gullible” would believe SMC’s claim.

It also said the appellate court “erred when it found that the top management of San Miguel was not aware of and did not actively promote the illegal activities of its sales and marketing personnel who were merely carrying out policies dictated by its senior executives.”


13 October, 2010