Market fragmentation

We recently learned that the European Commission has fined the world's leading brewing multinational, AB InBev, 200 million euros for its market fragmentation practices.

Anheuser-Busch InBev's most popular beer brand in Belgium is Jupiler, which accounts for roughly 40% of the total Belgian beer market by sales volume. AB InBev also sells Jupiler in other EU Member States, including the Netherlands and France. In the Netherlands, AB InBev sells Jupiler to retailers and wholesalers at lower prices than in Belgium because of greater competition. The European Commission says AB InBev deliberately prevented supermarkets and wholesalers from buying Jupiler at lower prices in the Netherlands and importing it into Belgium, thereby keeping prices higher for consumers in Belgium. The European Commission opened an antitrust investigation in June 2016 and then issued a statement of objections in November 2017. It has now imposed a fine of €200,409,000 ($225,203,601 USD) on AB InBev for infringing EU competition rules from 9 February 2009 to 31 October 2016.

And it is not an isolated case:

• Different product presentations for each market.
• Deliberate omission of mandatory labelling elements in certain countries.
• Restricting the purchase volumes of exporting customers.
• Prohibiting sales to certain customers or in certain areas/countries.
• Manufacturing the same product in different qualities for different markets.

These are all illegal yet common practices that some big brands use to keep prices higher in certain markets.

Perhaps this is a clear message to all those manufacturers that systematically apply commercial policies designed to fragment the market… Or perhaps not.