Dutch bars sue Heineken over alleged price fixing, demand lower prices

AMSTERDAM, Netherlands (AP) – An industry group representing Dutch bars sued Heineken NV and two other brewers on Monday, seeking damages for alleged price fixing that the EU says kept beer prices artificially high for years.
Spokesman Anthony van der Klis of the Horeca association–which also represents hotels, restaurants and caterers–declined to say whether it would seek more or less than the 219 million (US$310 million) that Heineken was forced to pay the EU in April. Heineken denies price-fixing and is appealing the fine.

The suit also names Grolsch NV and Bavaria NV, which were fined smaller amounts by the EU and are also appealing,

“We tried to reach a settlement before moving to a lawsuit, but (the brewers) didn’t want to talk seriously to us,” Van der Klis said.

A fourth brewer, InBev SA, was exempted from EU fines because it blew the whistle on several European beer cartels after regulators caught it fixing prices in Belgium. Klis said the Dutch association was in talks with InBev over a settlement.
Heineken spokeswoman Vivi Hollert said it was company policy not to comment. The suit had been widely expected: EU Competition Commissioner Neelie Kroes directly invited the association to seek damages at the time she levied the fines,

“The management of these companies at the very highest level participated in this cartel … knowing that this behavior was illegal,” Kroes said then. “Instead of respecting the law, they instead covered their tracks.
The companies coordinated prices for beer that customers buy in bars and the beer they buy from supermarkets, even for cheaper ‘no brand’ private label beers,” the EU’s executive arm said in the April decision.

Executives used code names to refer to secret meetings held in hotels and restaurants, the EU said. Under European law, executives are not personally liable for taking part in a cartel. Heineken’s first half earnings fell by 30 percent to 302 million (US$413 million) due to the fine. Chief Executive Jean-Francois van Boxmeer–who did not lead the company at the time the alleged price-fixing occurred in 1996-1999–acknowledged in August that the company had held meetings with its competitors.

“But we contest that led to any pricing agreements,” he said.

He predicted appeals of the EU fine would last until 2010, and said he doubted any civil suits would be successful in the interim. Van der Klis of the Horeca association said it was also seeking to force the brewers to lower their current prices,

“It’s incredible that it costs more for bars, who are wholesale buyers, to purchase beer than it does for consumers in the supermarket,” he said.

Asked why the bars do not simply buy their beer in a supermarket, he replied,

“Some do.” But he added that did not make sense in terms of logic or logistics, and that many bars are bound by contract to purchase their beer directly from Heineken. “They’re afraid of being cut off completely if they violate those terms,” he said.

At bars in Amsterdam, a 33 centiliter (11.2 ounce) glass of Heineken from the tap usually costs around 2.00 (US$2.40). A 30 centiliter (10.1 ounce) bottle costs around 0.50 (US$0.70) when purchased in a crate of 24 at the supermarket.


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