NEW DELHI, Sept. 24 (Reuters) – India’s antitrust watchdog on Friday fined beer giant United Breweries (UBBW.NS) controlled by Heineken and $ 16 million on Friday. local unit of Danish Carlsberg (CARLb.CO) in a case related to the cartelization of beer prices in the country.
The order comes after a lengthy investigation that saw the Competition Commission of India (ICC) raiding the brewers’ offices in 2018. The raids came after rival Anheuser Busch InBev (ABI.BR) told the watchdog he detected an industrial cartel in India after acquiring the operations of SABMiller Plc.
A detailed ICC investigation, reported by Reuters last year, found that the companies had collectively strategized to seek price increases in several states, creating a cartel.
In a final order issued on Friday, the TCC announced sanctions of 7.5 billion rupees on United Breweries and 1.2 billion rupees on Carlsberg, after the amounts were lowered as the companies cooperated with investigators.
AB InBev was granted 100% waiver of penalties in the case because it alerted the ICC to the cartel, the order adds.
The order passed by CCI imposed a penalty of $ 23,684 on Carlsberg India general manager Nilesh Patel and $ 6,497 on United Breweries sales manager Kiran Kumar, among others.
Heineken (HEIN.AS) said United Breweries was recently part of Heineken, which itself was not part of the ICC investigation. “We are currently reviewing the decision (CCI) and will consider our next steps, including the possibility of an appeal,” Heineken said.
United Breweries said it was reviewing CCI’s order. Kumar did not respond to an email seeking comment.
A spokesperson for Carlsberg also said the company was reviewing the order and there was no comment from Patel, while a spokesperson for AB InBev India said the company was ” satisfied with the result of this command “.
The ICC “orders the parties to cease and desist in the future from engaging” in such activities, said the 231-page watchdog order, which also imposed sanctions on several executives of company which she said were involved in pricing at the time.
The order casts a shadow over the three brewers, which account for around 88% of India’s $ 7 billion beer market. As a rule, companies file legal appeals against the decision of such an ICC.
The Indian alcohol market has complex rules. States regulate taxes and prices, which are approved annually by local authorities. Collective decisions on price increases gave them more bargaining power with the authorities.
“It seems that only to have a stronger negotiating power vis-a-vis the State”, the companies “went hand in hand and shared their commercially sensitive information”, specifies the order of the ICC.
The investigation carried out by the CCI investigation service revealed that “the collusion (…) was mainly due to the highest level of management of these companies”, including the managing directors, the vice-presidents and the chiefs. of sales and marketing, Reuters reported last year.
Reporting by Aditya Kalra and Abhirup Roy; Editing by Kirsten Donovan, Steve Orlofsky, David Evans and Louise Heavens
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