The injunction comes in response to a lawsuit filed by Heineken in the body in which it alleges infringement of competition law; Ambev must appeal the decision
The Administrative Council for Economic Defense (Cade) granted a preventive measure prohibiting Ambev from signing exclusive contracts with bars and restaurants until the end of the World Cup, on December 18th. The decision, signed by the board member Gustavo Augusto Freitas de Lima, is in response to a lawsuit filed by Heineken in the body in which it alleges infringement of competition law.
The measure is valid in markets in 17 large Brazilian cities until World Cup. Among them, So Paulo, Rio de Janeiro, Brasilia, Salvador, Fortaleza, Belo Horizonte, Manaus, Curitiba, Recife, Goinia, Belm, Porto Alegre, Guarulhos, Campinas, So Lus, So Gonalo and Macei.
In addition to Ambev, the decision also impacts Heineken itself, which will not be able to enter into exclusivity agreements in markets where it has more than 20% market share.
The percentage is the same as that established for Ambev, which currently holds around 60% of the beer market in the country. Having to limit exclusivity contracts with bars, restaurants and nightclubs to 20% – if you have more closed partners, you will need to release them to market brands from competing breweries.
The decision also includes current contracts and the measurement will be made by both the number of establishments and the volume traded. It includes points of sale for cold beer, as well as concerts, festivals and sporting events, which must also comply with the 20% limit set. Supermarkets, bakeries and convenience stores do not suffer the effects of the decision.
According to CADE, the measure defined by Lima, who is also the rapporteur of the case, takes effect immediately, but is subject to voluntary appeal to CADE’s Court.
The resolution is valid until the administrative proceeding becomes final or until there is a new decision. If it is not complied with, a fine of R$ 1 million reais per day may be imposed, in addition to suspension of exclusivity contracts for up to five years.
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In a statement, Ambev informed that it received the director’s decision with “complete surprise, especially after the General Superintendence of CADE concluded that there was no evidence to impose a preventive measure. We will take the appropriate measures. At Ambev we respect Brazilian legislation seriously “.
The Heineken Group, in turn, welcomed the decision and said that it had filed the lawsuit because it believed in fair competition and in the consumer’s freedom of choice.
“The decision prohibits the execution of new exclusivity contracts and limits the existing ones of the represented company throughout the national territory, as established for the Heineken Group in certain regions. This represents a positive message and a fundamental first step towards opening of the market, as it demonstrates Cade’s recognition of the harmful effects of abusive practices of exclusivity for the sector”, .