CCI fines United Breweries Rs 750 cr for indulging in cartelisation

The Competition Commission of India (CCI) has fined United Breweries (Holdings) Rs 750 crore for indulging in cartelisation in the sale and supply of beer in several states and union territories, including the platform of All India Brewers' Association (AIBA).

The other companies penalised by the antitrust body are SABMiller India Limited (now renamed as Anheuser Busch InBev India Ltd. after being acquired by Anheuser Busch InBev SA/NV) (AB InBev) and Carlsberg India Private Limited (CIPL).

While UBL and CIPl have been fined Rs 750 crore and Rs 120 crore, respectively, the penalty has been waived off for AB InBev as part of the "benefit of reduction in penalty under the provisions of Section 46 of the Competition Act." Meanwhile, 40% of UBL's penalty and 20% of CIPL's penalty have also been waived off due to the same provision.

Also Read: Heineken takes control of India's largest brewer United Breweries

 "Giving benefit of reduction in penalty under the provisions of Section 46 of the Act of 100% to AB InBev and its individuals, 40% to UBL and its individuals and 20% to CIPL and its individuals, CCI directed UBL and CIPL to pay penalties to the tune of approx. Rs 750 crore and Rs 120 Crore respectively, besides passing a cease-and-desist order," the CCI said in a statement.

"As AIBA was found to be actively involved in facilitating such cartelisation, CCI also held AIBA to be in contravention of the provisions of Competition Act, 2002 (the 'Act'), apart from the beer companies," it added.

The period of cartel was held to be from 2009 to at least October 10, 2018, the date on which the Director-General (DG) conducted search and seizure operations at the premises of the beer companies, with CIPL joining in from 2012 and AIBA serving as a platform for facilitating such cartelisation since 2013, read the statement.

Also Read: CCI finds AB InBev, Carlsberg, United Breweries colluded on prices, say sources

The antirust body found the three companies "engaged in price co-ordination in contravention of the provisions of Section 3(3)(a) of the Competition Act, 2002 (the 'Act') in the States of Andhra Pradesh, Karnataka, Maharashtra, Odisha, Rajasthan, West Bengal, National Capital Territory of Delhi and the Union Territory of Puducherry."

It said the companies collectively restricted supply of beer in Maharashtra, Odisha and West Bengal in contravention of the provisions of Section 3(3)(a) of the Competition Act, 2002 (the 'Act'), and in sharing of the market in Maharashtra as well as co-ordination with respect to the supply of beer to premium institutions in Bengaluru.

The CCI also found coordination amongst UBL and AB InBev with respect to the purchase of second-hand bottles.

Further, four individuals of UBL, four individuals of AB InBev, six individuals of CIPL and the Director-General of AIBA, were held by the CCI to be liable "for the anti-competitive conduct of their respective companies/association, in terms of Section 48 of the Act."