Indian Anti-Trust Probe In Beer Price Cartel Triggered Off By AB InBev Info

According to reports in the media, a tip off by the world’s largest brewer Anheuser-Busch InBev to Indian authorities about its detection of a cartel in the beer industry had triggered off an investigation into beer price-fixing by Indian anti-trust body.

Reports quoting sources said that there was price fixing by the Indian operations of AB InBev – which had been acquired by the brewer as a part of the $100 billion acquisition of London-listed rival SABMiller Plc in 2016, along with Denmark’s Carlsberg and India’s United Breweries. This practice, AB InBev said had been going on for years.

After closure of the SABMiller deal, internal investigation in the first half of last year was initiated by AB InBev. The investigators found evidence of discussions and agreement on the price of their ex-brewery beer production prices as submitted to the Indian state governments.  The ex-brewery prices would also take into account all costs that are involved in production, marketing and the proposed profit margins. That price was used by state governments to fix the maximum retail price.

“It was startling,” one of the sources reportedly told the media. “Extensive pricing information about the competition, some of which is extremely confidential, was available to all the three companies.”

E-mails providing evidence of executives of multiple companies allegedly violating Indian anti-trust laws were recovered from the offices of all the three brewers following raids by the Competition Commission of India (CCI) earlier this month.

Reports claimed that the raids were a result of information handed over to the anti-trust watchdog by AB InBev under what is called a “leniency programme” where some form of protection is given to the whistleblower who also happens to be a cartel member.

No comments were available from Sudhir Mittal, chairman of the CCI.

Budweiser and Corona are among the brands owned by AB InBev. A spokesman for the company said: “it would not be appropriate for us to comment” for this article.

Carlsberg, which sells beer under its own-name brand and also owns Tuborg, said it was “committed to complying” with all relevant laws.

There were no comments from United Breweries, which was one of the members of the cartel and is owner of 51 per cent of the Indian beer market and seller of brands Kingfisher and Heineken in India,. No comments were made by Heineken.

Antitrust compliance is taken very seriously by it, said Belgium-based AB InBev.

According to Euromonitor International, about 90 percent of beer consumption in the $7 billion India market is owned by the three brewers together. Experts say that a combined fine of up to $272 million could be hanging in fate of the three brewers of the investigators found evidence of them running a price cartel according to reports quoting sources. In case any of the executives of the companies are also found to be guilty of the crime, they would also be penalised.

(Adapted from Reuters.com)

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