Macedonian Thrace Brewery (MTB) has been given the go-ahead to pursue Heineken for damages in relation to anti-competitive practices and market abuse by its Greek subsidiary. The Amsterdam Court of Appeal has ruled last month that MTB can bring a legal claim in the Dutch courts against not only Heineken but also Athenian Brewery, its Greek operating company.
In 2015 the Hellenic Competition Commission (HCC) found Athenian Brewery engaged in “illegal anti-competitive market abuse” and imposed a penalty of EUR 31.5 million. The HCC found overwhelming evidence that Athenian Brewery, whose market share once exceeded 70% but had in the meantime fallen to almost 50 implemented a targeted policy to exclude competitors from wholesalers, on-trade (hotels, bars and restaurants) and off-trade retail outlets.
Heineken appealed the HCC’s decision but the Administrative Court of Appeal in Athens upheld the judgement against Heineken and its Greek subsidiary in 2017, thus clearing the path for additional claims by smaller breweries which were hampered by Athenian Brewery’s unfair trade practices. After a technical adjustment however, the amount of the HCC claim was reduced to EUR 26.7 million. (inside.beer, 6.7.2017)
As a consequence, MTB filed a EUR 100 million anti-trust lawsuit against Heineken in the Netherlands in 2017. The independently owned Greek brewer argued that despite its constant growth since its foundation in 1996, it failed to achieve a better distribution of its beer in Greece because Heineken abused its dominant market position. MTB reasoned that the case should be heard in the Dutch courts because Athenian Brewery’s illegal activities had been carried out under the supervision and with the knowledge of executives at Heineken’s headquarters. (inside.beer, 24.2.2017)
This claim was again challenged by Heineken but the Dutch brewer now lost again its appeal.
Demetri Chriss, Director of Business Development at MTB, commented the new ruling: “Heineken’s attempt to distance itself from the bad behaviour of its Greek operating company, Athenian Brewery, has failed. Heineken and Athenian Brewery will now both be held accountable in the Netherlands for the market abuse that was documented so powerfully in the HCC’s historic ruling”.
Demetri Chriss said: “Given the length and scope of these abuses, this may ultimately prove to be the costliest infringement yet for the Dutch brewer. It is our understanding that based upon the ruling by the Hellenic Competition Commission, other brewers have also filed claims in Amsterdam against Heineken and its Greek subsidiary.”
“This judgment also sends a strong message to the ‘too big to fail’ multinationals that use layered ownership structures to avoid parental liability for the actions of their badly behaving subsidiaries”.
The Greek market abuse case is not the first time that Heineken has been in trouble with competition regulators. In 2007, the company was fined EUR 219 million by the European Commission for participating in a cartel with its rival AB InBev and other brewers. In 2019, Heineken reached a USD 2.5 million settlement with US regulators over anti-competitive behavior and, last year, Heineken UK was fined GBP 2m for having “seriously and repeatedly breached” competition rules for pub operators. Heineken was described as a “repeat offender” by the UK ombudsman, the Pubs Code Adjudicator.
MTB was founded in 1996 by brothers Michael and Demetri Politopoulos in Komotini, Greece. Proud Greek nationals, they set up MTB as an independent brewer at a time when no premium Greek beer brands existed in the market. All Greek beer production was then either partly or wholly owned by foreign breweries. Two year’s after its foundation in February 1998, MTB launched its premium Vergina lager which is today MTB’s best known brand.
Though this has been a difficult year for many businesses, MTB has weathered the COVID-19 storm well thanks to its strong domestic support in Greece. Vergina alcohol-free beer launched last year is already outperforming rival brands and has helped MTB increase its overall market share year on year.
Demetri Chriss said: “We have continued to invest in our products, our growers and our community in these challenging times, honoring our commitments to them in full. We believe that by showing confidence in Greece, Greek beer drinkers are showing confidence in us and supporting our brands.”