The General Court of the European Union in Luxembourg has annulled a €31.7m fine imposed on Grolsch relating to a Dutch beer price-fixing cartel.
The fine was levied back in April 2007, when the European Commission (EC) penalised the Holland's major brewers for price-fixing between February 1996 to November 1999.
Heineken in Holland and its subsidiary, Bavaria NV and Koninklijke Grolsch NV (a SABMiller subsidiary) were fined a total of €273m for anti-trust activity.
The brewers sold beer in Holland via the on-trade, for consumption on the premises (hotels, restaurants, cafés), and the off-trade for home consumption (supermarkets and off-licences).
Co-ordinated price hikes
The EC ruled in April 2007 that the major Dutch brewers had co-ordinated prices, price increases for beer and customer allocation across both these distribution channels.
But after it was fined, Koninklijke Grolsch NV brought an action before the General Court seeking an annulment of the EC decision or a fine reduction.
The company denied it had participated directly in the infringement, arguing that employees of its subsidiary, Grolsche Bierbrouwerij Nederland, attended most of the meetings at issue.
Consequently, Grolsch argued that the EC should not have included it within the infringement ruling, and should instead have attributed liability to its subsidiary.
Having considered documents relating to the price-fixing meetings, the General Court said yesterday in a press statement prior to the judgement: “The evidence available to the EC was not sufficient to establish the direct participation of Koninklijke Grolsch in the cartel.”
The court added that, where a case decision concerned a number of addressees and raised problems of their attribution of liability, it must include an “adequate statement of reasons” with respect to each.
Thus, when a parent company was held liable for the conduct of its subsidiary, any decision must contain a detailed statement of reasons why.
EC ‘failed to explain’
Under “settled case law”, the court said that, when a parent company held 100% of a subsidiary’s capital, a “decisive influence” over the latter’s affairs for the sake of liability was presumed, unless the parent could prove its subsidiary’s market autonomy.
But the General Court ruled that the EC had “failed to explain” what led it to determine the ‘legal person’ responsible for running the subsidiary when the infringement was committed.
Thus, that person was unable to answer for the infringement or perhaps rebut the presumption that Koninklijke Grolsch decisively influenced its subsidiary.
The EC now has two months to appeal against the decision.
Under the original 2007 ruling , the EC granted brewing giant InBev immunity for blowing the whistle on the anti-trust infringements.
Heineken and its subsidiaries were initially fined €219.28m and Bavaria NV €22.85m, figures that the General Court reduced to €198m and €20.71m respectively on appeal this June, due to the “unreasonable length” of legal proceedings.