MercoPress. South Atlantic News Agency

Record fine on world largest brewer: 176 million USD

Retailer loyalty programs at the heart of the case

Brazil's antitrust regulator imposed a record fine of 352 million Reais (approximately 176 million US dollars) Wednesday on beverage giant AmBev. The Cade regulator found that AmBev, brewer of Skol, Brahma and Antarctica beers, used discounts, premiums and exclusivity agreements to dissuade retailers from selling competing brands.

Cade's Fernando de Magalhaes Furlan said the biggest impact of AmBev's anti-competitive practices was on consumers, who “will not have either the variety or prices they want”. AmBev, he said, “always operated at the limit of legality.”

With up to 70% of Brazilian beer sales, AmBev “has responsibility for acts that affect the entire market,” Furlan said. The fine is equal to 2% of AmBev's turnover in 2003, the year before the Cade investigation began.

AmBev merged in 2004 with Belgium's Interbrew and the resulting conglomerate, InBev, last year acquired US titan Anheuser-Busch to create Anheuser-Busch InBev, the world's largest brewer.

Besides imposing the fine, Cade ordered AmBev to discontinue retailer loyalty programs that include an exclusivity clause. The investigation was spurred by a complaint from Brazilian brewer Schincariol, which claimed that AmBev's practices caused sales of the smaller firm's Nova Schin and Kaiser to fall 20%.