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EU slams AB InBev $225 million anti-trust fine despite impressive Q1 2019

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World’s largest brewer, Anheuser-Busch InBev, AB InBev has been slammed with $225 million fine by an EU antitrust for preventing cheaper beer imports from the Netherlands into Belgium.

Antitrust laws are regulations that monitor the distribution of economic power in business, making sure that healthy competition is allowed to flourish and economies can grow.

According to the European Commission, the anti-competitive practice took place between February 2009 and October 2016.

The Commission’s decision came after a three-year investigation into the brewer’s most popular brand in Belgium, Jupiler, which has a 40 percent market share.

Margrethe Vestager, EU Competition Commissioner said consumers in Belgium have been paying more for their favorite beer because of AB InBev’s deliberate strategy to restrict cross border sales between the Netherlands and Belgium.

The Commission noted that AB InBev’s strategy included changing the packaging of some Jupiler beer distributed to Dutch retailers and wholesalers, such as removing French language information from labels. This made it hard to sell the beer in Belgium.

The company also restricted the volumes of Jupiler to Dutch wholesalers to prevent imports into Belgium and refused to sell some of its products to retailers unless they agreed to limit imports of Jupiler beer from the Netherlands to Belgium. Another anti-competitive tactic was to prevent Dutch retailers from offering customer promotions for beer to their customers in Belgium, the Commission.
Recall that tech giant, Google was recently slammed with an anti-trust fine totalling 1.5billion Euros.

AB InBev kick off the year on an impressive note as figures from its first quarter for the period ended 31 march show 5.9percent growth in revenue buoyed by volume growth of 1.3 percent, with own beer volumes up 1.0percent and non-beer volumes up 4.9percent, revenue per hl growth of 4.6percent, driven by healthy volume growth, global premiumization and revenue management initiatives.

The brewer posted revenue of $12.59 billion in Q1, with combined revenues of its three global brands, Budweiser, Stella Artois, and Corona, grew by 8.5percent globally, and by 14.0percent outside of their respective home markets. Cost of Sales increased by 6.0percent in Q1 and by 4.6% on a per hl basis, with top-line result driven by healthy performances in several key markets, including Brazil, China, the US, Europe, Colombia, and Nigeria.

AB InBev in 2017 acquired 72.17percent of SABMiller’s shares in International Breweries Plc, in a series of transactions which resulted in AB InBev acquiring controlling interests in the company.

 

OLUFIKAYO OWOEYE

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