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AB InBev Beer Pricing Fine Exposes Problem With EU Market | Bloomberg

If you’ve ever wondered why beer prices diverge so widely across Europe — from as little as 60 euro cents ($0.67) for a half-liter bottle of a local brew in the Czech Republic to 2.1 euros and more in Ireland — the European Commission’s decision this week to fine Anheuser-Busch InBev NV provides an important answer. The company, the world’s biggest brewer, must pay 200 million euros ($224 million) for market power abuse. The ruling, however, only scratches the surface of a major issue with Europe’s single market: its inability to ensure price convergence.

The AB InBev case, which the commission began investigating in 2016, is relatively straightforward. In Belgium, the company’s Jupiler beer accounts for about 40 percent of all beer sales by volume. AB InBev was able to charge a higher price there than across the border in the Netherlands, where the beer market is more competitive. To keep Belgian retailers from buying Jupiler in the Netherlands — there is, after all, no customs border between the two countries — AB InBev leveraged the EU’s food safety rules, which require any obligatory labeling to be easily understood by consumers in the country where the food is sold. The brewer removed the French version of the mandatory information from the Jupiler bottles sold to Dutch drinkers. It also limited the amount of beer it would sell to Dutch suppliers. (AB InBev cooperated with the investigation, had its fine reduced and isn’t appealing).

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AB InBev Beer Pricing Fine Exposes Problem With EU Market – Bloomberg.

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