Wed, Jan 15, 2014 - Page 15 News List

German breweries fined US$145m over price fixing

CARTEL PROBE:The top German breweries fixed a nationwide rise in the price of beer by 5 to 7 euro per hectoliter for barrelled beer, the cartel office said

Guardian, BERLIN

German beer’s status as a national treasure is under threat after four of the country’s largest breweries were fined 106.5 million euro (US$145.6 million) for price fixing.

The variety and general high quality of German brewing has long been a source of national pride.

Last month, the brewers’ union applied to have the Reinheitsgebot, or purity law, designated a UNESCO world treasure.

On Monday, the German federal cartel office revealed that between 2006 and 2008, managers from five breweries, Bitburger, Krombacher, Veltins, Warsteiner and Anheuser-Busch, held talks in person and over the telephone in order to fix the prices of their products.

The talks resulted in a Germany-wide rise of 5 to 7 euro per hectoliter for barrelled beer, and 1 euro per crate of bottled beer, according to the cartel office head, Andreas Mundt.

The Belgian-Brazilian multinational Anheuser-Busch InBev, which manufactures Beck’s beer, is to be exempted from the fine after agreeing to act as a key witness in the case.

The other four breweries have reportedly cooperated with the investigation in order to reduce their punishment.

Nonetheless, the fines are expected to hit the companies hard.

One brewery insider told the Welt newspaper that his company was set to lose one or two years’ worth of earnings.

Investigations into two unnamed large companies and four smaller regional breweries are still ongoing.

Germany may still be the third-largest consumer of beer in the world, but consumption has been sinking steadily over the past 10 years.

In 2012, Germans drank 107.2 liter per head — about a third less than in 1976.

At the same time, brewers have been facing rising costs for energy, hops and barley malt.

The Union for Private Breweries, which represents the interests of smaller regional brewers against multinationals, welcomed the fine as “an important consequence.”

Its director, Roland Demleitner, said large brewery conglomerates had been increasingly aggressive in their attempts to push small regional breweries out of the shrinking market.

“We hope that this fine will encourage beer drinkers and bar owners in Germany to think twice before they choose a characterless beer from a multinational over a regional beer with real character,” Demleitner said.

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