India’s antitrust agency fines United Breweries and Carlsberg for price-fixing cases

File Photo: Carlsberg Beer Cans can be seen at a pub in Mumbai, India, on October 20, 2018. The photo was taken on October 20, 2018. REUTERS / Danish Siddiqui / File Photo

September 24, 2021

By Aditya Kalra and Abhirup Roy

New Delhi (Reuters)-India’s anti-trust watchdog on Friday penalized Heineken-managed beer giant United Breweries for $ 102 million and Carlsberg’s local unit in Denmark for $ 16 million.

The order came after a lengthy investigation into the 2018 competition commission of India (CCI) attacking a brewery office. The attack broke out after rival Anheuser Busch InBev told Watchdog that he had detected an industrial cartel in India after acquiring the business of SABMiller Plc.

According to a detailed CCI survey reported by Reuters last year, the two companies were collectively planning to forge cartels and seek price increases in several states.

In a final order announced on Friday, CCI announced a fine of Rs 7.5 billion at United Breweries and Rs 1.2 billion at Carlsberg after the company worked with investigators to reduce the amount.

AB InBev warned the CCI about the cartel and added that the order was 100% exempt from penalties for the case.

The order passed by the CCI, among other things, penalized Carlsberg India’s managing director Nile Spatel for $ 23,684 and United Breweries sales chief Kirankmar for $ 6,497.

Heineken said United Breweries recently became part of Heineken and was not itself part of the CCI investigation. “We are currently considering a (CCI) decision and will consider the next steps, including the possibility of filing an appeal,” Heineken said.

United Breweries said it is considering ordering CCI. Kumar did not respond to the email asking for comment.

A Carlsberg spokesperson also said the company was considering an order and had no comments on behalf of Patel, and a spokesman for AB InBev India said the company was “satisfied with the results of this order.” ..

The CCI “instructs the parties to stop indulging in the future and stop indulging in such activities,” Watchdog’s page 231 order told executives that it was involved in price-fixing at the time. Also said it imposed penalties.

The order casts a shadow over three breweries, which account for about 88% of India’s $ 7 billion beer market. Companies typically file legal objections to such CCI decisions.

The Indian alcohol market has complex rules. The state regulates taxes and prices, which are approved by local governments each year. By deciding on price increases collectively, companies were able to increase their bargaining power with the authorities.

According to the CCI order, “it seems that the bargaining power with the state has only been strengthened,” the two companies said, “we cooperated with each other and shared confidential information commercially.”

According to a survey conducted by CCI’s research department, “collusion was primarily due to the highest level management of these companies,” including managing directors, vice presidents, sales and marketing managers, according to Reuters. That is.

(Report by Aditya Kalra and Abhirup Roy, edited by Kirsten Donovan, Steve Orlofsky, David Evans, Louise Heavens)

India’s antitrust agency fines United Breweries and Carlsberg for price-fixing cases

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