The institution considers the agreements through which restaurants or bars purchase minimum volumes from wholesalers they previously decided on together with brewers should be done away with. Agreements in line with which units can sell only the products of a single company should also be eliminated, according to competition authorities.
“Given the oligopoly structure of the market and the strengthening position of the leading two brewers in the past two years, with shares of above 30%, they are recommended to assess the exclusive distribution system they embraced, in order to determine whether the sealed agreements lead to a real increase in efficiency,” reads the report that is still under public debate.
According to many of sealed contracts, restaurants and bars can only sell the products of a single brewer and cannot change the supplier, which, in the opinion of the competition watchdog, diminishes competition pressures.
The stake of such contracts means a market of EUR700 million, in the context where beer sales through HoReCa account for 22% in beer consumption, according to data from The Brewers of Europe. At an average price of EUR1.68/liter of beer on this segment, beer sales through HoReCa near EUR700 million (according to 2012 data).
Competition authorities recommend the maximum period for these contracts be of five years and HoReCa units should be able to cancel the contract unilaterally.
Restaurant officials say that even if this clause is done away with, brewers and bars or restaurants can reach gentlemen’s agreements.
“The market is not educated, either. Consumers drink what they’re offered,” said the representative of a bar of Bucharest’s Old Town.
Another practice in the beer industry is for brewers to offer bars or restaurants objects such as umbrellas, menus, furniture. In this case as well the period is indefinite and the Council recommends the period be reduced to five years.
Competition authorities’ document is under public debate until mid-May. “On the basis of opinions received from the market, competition authorities can adjust their own conclusions and recommendations, so that they may represent the most adequate moves to increase competition on the market. Information obtained in the wake of market analysis can bring clues as to the opening of an investigation on anti-competition agreements or abusive behavior,” is the answer the press department of the institution sent to ZF’s questions.
On the other hand, major brewers said they were still analyzing the report data, while the representatives of the Brewers of Europe said they did not have a point of view as the analysis pertained to individual brewers.
The competition authorities’ report also shows the market is dominated by four large brewers. They’ve embraced a policy of strengthening their product portfolios on different segments, thus easing competition pressures, while small brewers have focused on producing private labels for modern retail.
The domestic beer market is dominated by four large companies that are owned by multinationals: SAB Miller (owning Ursus), Heineken, Molson Coors (Bergenbier) and Carlsberg (URBB). These hold together 85% of the Romanian beer market. Beside the four, Romaqua and European Food have also developed significant capacities, while only four small brewers have resisted foreigners’ onslaught in the past 12 years.
(English version by Catalina Apostoiu)