Just in time for the Euro

Competition watchdog finds market abuse in beer

Brau Union is now facing a severe fine.

(Bild: APA/FOTOKERSCHI.AT/KERSCHBAUMMAYR)

Serious allegations against Brau Union: According to the Federal Competition Authority (BWB), Austria's largest brewery company is said to have abused its dominant market position to restrict the market entry of competing beer producers and to have squeezed existing drinks retailers out of the market. An "appropriate fine" is being demanded.

According to the BWB, the application to the Cartel Court for the imposition of a fine was preceded by extensive investigations that had substantiated the suspicion of "a series of unlawful practices". From October 2021, an increasing number of anonymous complaints about Brau Union's conduct were received, and in April 2022, a search was carried out at the headquarters in Linz.

The cartel court can impose fines of up to ten percent of the previous year's group turnover. According to "WirtschaftsCompass", Brau Union achieved a turnover of 850.6 million euros in 2022.

Brau Union is now facing a severe penalty.

(Bild: APA/FOTOKERSCHI.AT/KERSCHBAUMMAYR)

Customers were threatened with a delivery stop
Specifically, Brau Union is alleged to have exploited its dominant market position and threatened beverage customers that it would no longer sell them beer if they did not also purchase other beverages from Brau Union. In addition, Brau Union is alleged to have obliged customers not to stock any beverages from other competitors or to cover the majority of the product range via Brau Union. Market and customer allocations are also alleged to have occurred, some of which have already been remedied. The BWB also accuses the group of having exchanged competition-sensitive data in order to monitor the market and the market entry of competitors, for example.

Brau Union was able to increase its market share during the pandemic
In the past, there had been repeated criticism of Brau Union's market power, especially from competing independent Austrian breweries such as Stiegl and Ottakringer. As a result of the price war during the coronavirus pandemic, Brau Union's market share has risen further from its previous level of around 50 percent. The Austrian market leader unites the beer brands Gösser, Zipfer, Kaiser, Puntigamer, Schwechater, Wieselburger, Schladminger and Edelweiss, among others, under its umbrella.

Brau Union was created in 1998 through the merger of Österreichische Brau AG and Steirerbrau. Since 2003, the company with 2700 employees, 15 beer brands and nine breweries has belonged to Heineken, the second largest beer group in the world.

Company speaks of "fundamental misunderstanding"
What does the company say about the antitrust watchdog's application? The company speaks of a "fundamental misunderstanding" and declares that it is cooperating "fully and transparently" with all the authorities involved. The brewery, which operates from Linz, also calls the allegations of the Federal Competition Authority "concerns" that will be clarified. No price disadvantages have arisen for end consumers and customers, it emphasizes.