Greek beer market investigation exposes EU competition weaknesses

A ten-year long competition investigation into the Greek beer market has raised questions over the European Commission’s ability to enforce fair competition in the EU member states. EURACTIV Greece reports.

The Greek beer market is dominated by two of the industry’s largest multinational players: Heineken, which is marketed under a number of different brands including Alfa and Amstel, and Carlsberg, which is marketed primarily under the Mythos and Fix brands.

Both companies currently control in excess of 85% of the Greek beer market, and are typically able to sell their products at a premium, whereas the approximately 25 independent Greek brewers that are operating today are relegated to the remaining 15% of the market.

“We are typically forced to offer significant discounts and other concessions just to be able to secure a nominal presence in mainstream retail channels,” the president of the organisation of small brewing companies in Greece, Dimitris Politopoulos, told EURACTIV Greece.

“The two market leaders have proven that they are determined to safeguard their dominant position in Greece at all costs, and several of the tactics that they employ towards this end have been the subject of the Hellenic Competition Commission’s investigation into the alleged abuse of dominant position by Heineken’s local subsidiary, Athenian Brewery,” he added.

EURACTIV Greece asked Athenian Brewery for comment, but did not receive any reply at the time of this article’s publication.

In 2004, the Hellenic Competition Commission (HCC) opened an ex-officio investigation into the alleged abuse of dominant position by Heineken’s local subsidiary. The investigation lasted more than ten years without producing any result, triggering concerns over the effectiveness of Greece’s national competitions authority.

But just two weeks ago, the HCC announced that it will issue its decision on the case by the end of November. “There really is no legitimate excuse or explanation for the HCC’s excruciatingly long delay in handing down their decision,” Politopoulos told EURACTIV Greece.

Threats and abuse

According to Politopoulos, Greece served as a “cash cow” for the big players in the beer market. The lack of a competitive environment and an undemanding customer base set the stage for high profitability with a bare minimum of operating costs, he said. Independent brewers were faced with a number of unique challenges, most of which are related to Heineken and Carlsberg’s “elephant in the room” status in the domestic wholesale and distribution networks.

“The threats and abuse that I have endured over the past 17 years, as well as the actions that have been taken against our products in supermarkets, wholesale depots and elsewhere, are all at the disposal of law enforcement and judicial authorities should they wish to investigate them further,” the Greek businessman said.

Commission’s role

Politopoulos stressed the issue was brought to the attention of the European Commission’s regulatory authorities (DG Competition). Successive commissioners and directors “have shown an interest in the Greek beer market case”, he said.

“Unfortunately, the EU’s Competition authorities’ jurisdiction appears to be quite limited relevant to their ability to expedite or otherwise influence the national Competition Commissions’ decisions on cases such as the one in question,” he said.

Contacted by EURACTIV, the Commission’s Competition DG refused to comment on the case, saying the investigation was led by a national competition authority.

The EU executive, however, acknowledges shortcomings in the way competition rules are applied at national level.

On 4 November, the Commission launched a consultation process to get public feedback over how to strengthen national competition authorities in the 28-country bloc.

Margrethe Vestager, the European Competition Commissioner, said that while some agencies enjoyed the same powers as the European Commission, a number lacked some essential tools to deter anti-competitive practices.

>>Read: Vestager wants national antitrust agencies to go digital

Open market for growth

Charis Theocharis, Greece’s former highest official in charge of public revenues and current lawmaker of the centrist Potami party, told EURACTIV Greece that the Commission should follow more closely the investigations conducted at national level.

“The proper functioning of the single market is necessary in order to open the door to growth,” he stressed. At a time when the country is urgently seeking foreign investments in order for the economy to take a breath, it’s evident “that we need to have an open market and institutions that effectively guarantee its proper functioning,” he said.

“Today, perhaps more than ever, Greece must do everything in its power to convince its European partners and investors worldwide that our nation is willing and able to enforce the rule of law and prove that we are in fact open for business,” Politopoulos underlined.

“It goes without saying that any hope Greece has of attracting investors hinges upon its lawmakers’ and independent commissions’ determination to take down anyone, regardless of their size, connections or perceived status, that flaunts the law of the land or attempts to exploit their dominant position through the use of illicit means,” he concluded.

  • By the end of November 2015: The Greek competition authorities will issue a decision on the Greek beer market case

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