On March 3, 2023, the Secretariat of Trade (the “Secretariat”) issued Resolution No. 96/23 whereby a fine of approximately AR$389 million (approximately US$1.8 million) was imposed to Cervecería y Maltería Quilmes S.A.I.C.A.Y G. (“Quilmes”) -a local subsidiary of the AB InBev group and Argentina’s leading beer company– for failing to comply with the corrective measures issued by the Secretariat in August 2021, all in accordance with the Antitrust Law No. 27,442.
In August 2021, the Secretariat (based on the investigation carried out by the CNDC) imposed a fine worth AR$150 million(approximately US$ 1.4 million, taking in consideration the exchange rate in force at the time) to Quilmes for abusing its dominant position in the domestic beer market by means of deploying a loyalty-enhancing strategy with the objective of creating exclusive spaces for the commercialization of Quilmes’ brands.
In addition to the fine, the Secretariat imposed severe and overarching corrective measures to prevent Quilmes from further abusing its dominant position and to restore effective competition in the domestic beer market. Among these, the Secretariatprohibited Quilmes to implement any type of formal or informal commercial agreement with both on-premise and off-premise points of sale with the object or effect of generating vertical restrictions, 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. Furthermore, the Quilmes was ordered to communicate the new commercialization conditions to all its points of sale in the country.
Thereafter, in December 2021, certain competitors reported to the CNDC that Quilmes was not complying with the corrective measures previously imposed by the Secretariat. In particular, the CNDC verified that Quilmes had failed to comply with the notification of the new commercialization terms and conditions to the points of sale imposed by the Secretariat. According to the CNDC, 209 days had elapsed from the time the Secretariat issued its original infringement decision, and the time Quilmes began to notify the points of sale of the new commercialization terms and conditions dictated by the Secretariat.
Therefore, based on the CNDC’s recommendation, the Secretariat imposed a periodic penalty fine amounting to 11,467 administrative units per each day of non-compliance with the corrective measures, thus the total fine imposed to Quilmes amounted to AR$389 million (approximately US$1.8 million).
The Secretariat’s decision to make use of the periodic penalty fines in relation to anticompetitive conducts constitutes an unprecedented measure. This decision could pave the way for future enforcement actions, and companies object of a past infringement decisions containing cease-and-desist orders and/or corrective measures should remain watchful.
