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Archive for December 11th, 2017

Reactions to DG Comp’s beer investigation

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A few days ago the European Commission opened an investigation into an alleged abrewse of dominance to restrict beer imports into Belgium (see here).

Ale those of you that thought we would barley survive without endives will now hopfully realize that this blog is lager than one single product. At yeast, we now have a hopportunity to show that we can focus on the big pitcher.

To be sure, there have been plenty of cases concerning beer before and we have written a number of posts on this drink (see e.g. here and here). In that sense, this may seem like a déjà-brew.

Indeed, alcoholic beverages are perhaps the product that has contributed the most to EU case law and to competition law in particular. Sometimes they were the subject of cases and, even when they were not, their influence clearly emanates from the content of some decisions…

But… wheat a second…. Actually, we can’t comment on this case due to a conflict: AB Inbev was the sponsor of the brewtal open bar we held at our first Chillin’Competition conference. Anything we say could therefore be regarded as an attempt to persuade the Commission to leffe the company be and drop the investigation.

Instead of providing you with our views, we will therefore provide you with some reactions from people who typically seek reactions, the members of the “Brussels competition press corps”, who have a stella reputation as competition commentators and a thorough knowledge of the relevant market. Our sources include Aoife White and Gaspard Sebag (Bloomberg), Rochelle Toplensky (FT), Lewis Crofts and Matthew Newman (MLEX) and Nicholas Hirst (Politico).

Unfortunately, after a few drinks we don’t remember who said what, so we can’t really attribute any quotes, sorry.

According to one of our sources, the decision to open the case was adopted only in light of a special report from the Chief Economist. The aim of the report was to identify the product that enjoyed the highest consumption among officials. This was part of a strategy to first adopt a decision and then lodge a follow-on action for damages suffered by the Institution, much like what happened in the elevators case (see here).

Another Brussels-based journalist reports, on the contrary, that the case originates from an informal complaint by the College of Europe alumni association (based in Place Lux) that, reportedly, is preparing a billion euro class claim.

The “Brussels Bar Association” also claims to be thd representative of the main class affected by the case. We have no confirmation of whether they represent lawyers or actual bars.

Conversations between our sources and parties connected to the case nevertheless all converge in anticipating that defence arguments will be threefold, namely (i) -“Who ever reads the small print on beer cans??”; (ii) “Competition is just one Chimay away” and (iii) “Hasn’t anyone realized that water is more expensive in this country!?”.  Economists in turn, are wondering whether one should factor in hangovers and associated lack of activity to the consumer surplus/deadweight loss analysis.

The case is also expected to shed light on several procedural issues (“if you stop drinking, can you challenge jurisdiction?”). The investigation is nonetheless expected to leffe issue unresolved and to result in consumer uncertainty (“so where do I go to buy my Christmas Kriek supply – Lille or Eindhoven?”, is a question many are asking themselves in the wake of the Commission’s press release).

If any of you has any comments on the case, feel free to comment on this post.


Written by Alfonso Lamadrid

11 December 2017 at 2:11 pm

Posted in Uncategorized