Have you ever wondered why your pint of beer is so costly? The Competition Commission of India (CCI) may have an answer.
According to a Reuters report, the CCI conducted a probe against three major brewers in India for colluding to fix beer prices.
The CCI probe has found that 15-20 executives from the three brewers held discussions on beer prices before submitting their prices to the regulating authorities. The investigation report was submitted in August but has not been made public. The Reuters report quoted two anonymous sources who confirmed the investigation and the report.
Which Three Companies Are These?
The three companies investigated by the CCI were AB InBev, Carlsberg and United Breweries.
AB Inbev, an international brand, sells Budweiser and Corona beers. Carlberg sells a beer under its own name and Turborg. The third company, United Breweries, owns the popular Kingfisher brand and partly owns Heinken beer.
Reuters reported that according to IWSR Drinks Market Analysis, the three companies own 85 percent of the beer sales in India. AB InBev is also the world’s largest brewer.
How the Collusion Came to Light?
The collusion between the three companies came to light following an internal investigation by the AB InBev. After the company learnt that its Indian operation was involved with other brewers in fixing beer prices, AB InBev reported the matter to the CCI.
The malpractice was reported under a leniency programme offered by the CCI, which provided protection to any company reporting on a collusion of which they were a part.
What Will Happen to the Companies?
Any collusion between companies in the fixing prices would invite hefty penalties. The CCI is expected to fix these penalties in the coming months. AB InBev may avoid the fine as it tipped off the CCI. The companies will get a chance to present their defence and challenge the penalties ordered by the CCI.
At the same time, Reuters reported that Carlsberg and United Breweries have filed leniency applications in the case as well.
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