No fines for Carlsberg, Heineken

- Last updated on GMT

Related tags: European union, European commission

The European Commission has been forced to drop its case against
brewers Heineken and Carlsberg after failing to find any recent
evidence that they agreed not to compete in each others' markets.
Both companies have long protested their innocence, but the
Commission's decision hardly exonerates them of any wrongdoing.

An investigation by the European Commission into alleged collusion between two of the continent's biggest brewers, Carlsberg and Heineken, has ended without any sanctions being taken against either company.

Then investigation began as far back as May 2000 with dawn raids by the Commission on the head offices of the two brewers, which was looking for evidence that the two companies had agreed not to compete in each others' home markets between 1993 and 1996.

However, in a statement issued yesterday the Commission said that it was stopping the investigation because it had found no clear evidence that the two companies had colluded after 1995. Under EU rules, the Commission cannot fine companies for infringements of the law if there is no evidence of malpractice in the five years prior to the investigation beginning.

The Commission's investigation was begun after the raids revealed documents dating from 1994 which seemed to suggest that the companies had agreed not to compete with each other in the Dutch and Danish markets.

When the two firms were told in May this year that the Commission was formally looking for evidence of collusion, they both sternly denied any wrongdoing, saying that the Commission had wrongly interpreted the documents. They added that the chances of either company entering the home market of the other was in any case highly unlikely, given the dominant position held by both companies in their respective markets.

The Commission said that it had listened to both companies' arguments, and carried out further investigations at the two firms' offices in August this year. Having failed to find any further evidence to corroborate its claims, the Commission has finally been obliged to drop the case.

The Commission seems to have been hamstrung by its own regulations. While it clearly remains convinced that there was some sort of agreement between the two companies - and that such an agreement would have been an infringement of European competition law - the only evidence it appears to have falls outside the time limit set for such investigations, so it is powerless to act against the two firms.

Of course, the two brewers have always protested their innocence, and their suggestion that competing in each others' markets would be difficult anyway certainly carries a lot of weight. But for the Commission to go so far down the road towards fining the two firms only to drop the case at the last minute certainly suggests that its evidence was strong, even if it did date from the early 1990s.

Related topics: Carlsberg, Markets, Heineken

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