On April 11, 2023, the Federal Civil and Commercial Court (hereinafter, the “Court”) confirmed the sanction imposed on Cervecería y Maltería Quilmes S.A.I.C.A.Y.G. (“Quilmes”) for exclusionary abuse of dominant position by dismissing the appeal filed against Resolution No. 866/21 (the “Resolution”) issued by the Secretariat of Trade (the “Secretariat”) on August 24, 2021, all in accordance with the Antitrust Law No. 27,442.
In 2016, the National Commission for the Defense of Competition carried out an investigation, by means of which it verified that Quilmes -leader in the production and distribution of beer in Argentina (the “Relevant Market”) and local AB InBev subsidiary- had abused its dominant position in the Relevant Market by means of deploying commercial strategies aimed at building customer loyalty by creating retail beer outlets exclusively for Quilmes-owned brands. Accordingly, the Secretariat imposed a fine worth AR$150 million (approximately US$ 1.4 million, taking into consideration the exchange rate in force at the time, currently approximately US$ 380,000). In addition to the fine, the Secretariat imposed corrective measures intended to prevent Quilmes from further carrying out abusive practices, such as: requesting or imposing exclusivities; requesting its products to be the first option for consumers; eliminating competing brands from the menu; or limiting the exhibition of competing brands on shelves. By means of these measures, the Secretariat forbade Quilmes from entering into commercial agreements capable of generating vertical restraints both On premise and Off premise sales channels, emphasizing that these exclusionary acts “were intended to prevent the growth of other firms, while also resulting in harm to end consumers, who lose the possibility of acting on competition through the exercise of their preferences”.
Quilmes filed an appeal against the Resolution, by means of which it argued -among other arguments- that the commercial strategies object of the investigation are only proof that Quilmes does not hold a dominant position in the Relevant Market, since it must resort to such practices to compete against other competitors.
When rejecting the appeal, the Court based its decision on the fact that the mere existence of a plurality of companies in the market does not necessarily imply that they exert competitive pressure on Quilmes. Furthermore, it noted that the size of the economic structure of Quilmes and the amounts invested by it are considerably higher than those that could be made by any competitor, which allows Quilmes to carry out loyalty strategies such as the denounced, thus generating closing the market for its current or potential competitors that do not have sufficient financial strength to replicate similar competitive strategies.
This report cannot be considered as legal or any other kind of advice by Allende & Brea.
