EU regulators call time on Dutch beer cartel

(BRUSSELS) - EU regulators brought their "no-tolerance" anti-cartel campaign to the Dutch beer market on Wednesday, fining Dutch brewers Heineken, Grolsch and Bavaria 274 million euros (372 million dollars).

Judging the fines to be unfairly high, the three companies said they would contest the decision by lodging appeals before an EU court.

Belgian-Brazilian brewing giant InBev was also named in the case but was not fined because it blew the whistle with "decisive information" leading to EU trustbusters breaking up the cartel.

In the latest action in the European Commission's anti-cartel campaign, the EU's competition watchdog accused the companies of fixing prices in the Dutch market between at least 1996 and 1999.

Competition Commissioner Neelie Kroes said officials from the companies used false names and other covers to hide their participation in secret meetings at hotels and restaurants.

"It is unacceptable that the major beer suppliers colluded to hike up prices and carve up the market between themselves," Kroes said.

"The highest management of these companies knew very well that their behaviour was illegal, but they went ahead anyway and tried to cover their tracks," she added.

Heineken was handed the biggest penalty for its role because of its size and was ordered to pay 219 million euros. However, the two smaller Dutch brewers did not get off easy either, with Grolsch told to pay 31.7 million euros while Bavaria was fined 22.9 million euros.

"Heineken is highly surprised by the decision and finds the fine excessive and unjustified given the strong arguments that the company put forward to the European Commission," the company said in a statement.

Despite their smaller fines, Grolsch and Bavaria also expressed shock at the decision and, like Heineken, vowed to appeal.

Shares in Heineken, which had said it expected a fine, recovered from early losses and were showing a gain of 0.33 percent at 38.79 euros in late trading in Amsterdam while Grolsch tumbled 1.51 percent to 31.12 euros. Bavaria is a privately held company.

Even though it escaped a fine, InBev shares were off 0.91 percent at 56.37 euros in Brussels trading.

Between them, the three Dutch brewers and InBev hold 92 percent share of the beer market in The Netherlands, where the Dutch quaff on average about 80 litres of beer a year.

The roots of the investigation go back to the beginning of the decade when Commission trustbusters launched a probe into suspected unfair practices by some European brewers, leading in September 2005 to formal charges being lodged against the Dutch cartel.

The regulators' probe has already led to fines against brewers for running cartels in Belgium, France, and Luxembourg.

Kroes has made a "no-tolerance" crackdown on cartels a priority during her tenure as Europe's top regulator and has lodged ever-rising record fines against the illegal clubs.

Four months into the year, EU regulators have already set a new annual record for fines in cartel cases with the Dutch trust bust bringing the 2007 total to slightly over two billion euros.

Much of the total for this year came in February when the Dutch commissioner slapped the biggest fine ever in a EU cartel case by ordering leading lift makers to pay a combined 992 million euros.

In recent months, her growing team has handed formal charges against suspected cartels making professional-quality videotape, glass and bathroom fittings as well as bulk liquids shippers.

Further details - European Commission press release