German beer giants fined over €106m for price-fixing

Germany's leading brewers were crying into their beer yesterday after agreeing to pay a fine of €106.5 million for setting prices through an illegal cartel.

The breweries fined included those behind household beer brands Kromacher, Bitburger, Warsteiner and Veltins, as well as the lesser-known private brewery Ernst Barre.

The brewer of Becks beer, the multinational Anheuser-Busch, escaped having to pay a fine after reporting the illegal practice to Germany's cartel authorities. Between them, the fined companies sell half of all beer drunk in Germany.

According to an investigation of activity between 2006 and 2008, the firms agreed price increases that added €1 to a 20-bottle crate of bottled beer or an extra €5 to €7 per hectolitre of draft beer.

"Our investigations have allowed us to prove there were agreements between the breweries, based primarily on personal and telephone contacts," said Andreas Mundt, president of the German cartel office.

Cartel office
Yesterday's fine marks the end of an investigation that began in 2011. Probes into six other unidentified brewers are ongoing. In addition to the fines, the cartel office is taking legal proceedings against seven brewery managers.

Without the testimony of Becks executives, investigators admitted, it was unlikely they would ever have uncovered the price-fixing ring. The investigators said the beer prices were being fixed by top executives meeting at regular drinks industry events rather than the more usual practice involving middle management, making discovery more difficult.

The five companies expressed their regret yesterday.

The cartel office didn’t say how the €106.5 million fine will be divided between the companies. Either way, it comes at a sensitive time for German beer companies. Domestic sales have been falling for years.

"This fine will take our earnings for one or two years," said one unnamed brewer to Bild.