The EU has fined companies including Interbrew and Roche for anti-competitive behavior. As part of its renewed focus on cartels, the EU has been investigating two cartels that fixed beer prices in Belgium and another that fixed the price of food and drink additive citric acid. Most companies had already made provisions for the fines, so the most noticeable affect is likely to be a more wary approach to competitive practices.
On Wednesday, the European Commission slapped heavy fines on four brewers, including Interbrew, Alken Maes, Haacht and Martens, for their involvement in two distinct cartels in Belgian brewing between 1993-98. Interbrew admitted its involvement and co-operated with the EU investigation.
Interbrew was fined E46.5 million, Danone, which owned Alken Maes over the relevant period, was fined E44.6 million, and smaller Belgian beer companies Haacht and Martens were both fined E27,000. The first cartel involved Interbrew and Danone, which together accounted for around 70% of the Belgian market, and their anti-competitive arrangements involving restaurants, cafes and hotels. The second cartel concerned private label beers.
The European Commission is placing a renewed emphasis on cartels. The commission also fined Roche and Archer Daniels Midland on Wednesday for conspiring to fix the price of the additive citric acid, used in various foods and soft drinks. Just two weeks ago, it imposed record fines totaling €855m on eight pharmaceutical companies, including Roche and BASF, for attempting to control the vitamins market.
Yet despite European competition commissioner Mario Monti’s apparently hard line on cartels, many view his pledge to find and punish offenders with some scepticism, suggesting his investigations are overly drawn-out and are regularly similar to cases already concluded in the US. Both the vitamins and citric acid cases mirrored US investigations.
The fine will have no effect on Interbrew’s results as it made a provision in 1999, which has proved to be sufficient to cover the full costs. However, the recent investigations, combined with the EU’s tougher stance, will be enough to make companies more stringent about keeping to ethical guidelines.
Interbrew has developed a “strict compliance program and a reinforced code of conduct” with twice yearly assessments to ensure that all decision makers are meeting competition guidelines. Roche has sent 7,500 managers on a corporate training program focused on appropriate behaviour in business.
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