Marval O’Farrell Mairal acted as counsel in the Argentine competition enforcer’s investigation which concluded that Quilmes’ had abused its so-called “dominant position” and slapped the company with a 150 million Argentine peso fine

The Secretary of Domestic Trade sanctioned Cervecería y Maltería Quilmes with a 150 million Argentine peso fine and order to refrain from imposing contractual exclusiveness on account of so-called “abuse of dominant position.” The investigation, conducted by the National Competition Authority, began in 2016 following complaints by Compañía Cervecerías Unidas S. A., Compañía Industrial Cervecera S. A., and Otro Mundo Brewing Company S. A.

Marval O’Farrell Mairal advised Compañía Cervecerías Unidas S. A. and Compañía Industrial Cervecera S. A., through the Antitrust team led by partner Miguel del Pino, along with associate Ariel Irizar. Partner Rodrigo Fermín García and associate Alejandra Cortiñas from the Litigation and Arbitration team assisted as well.

“This is a truly outstanding case, one of the few where the local antitrust authorities sanctioned a company as a result of a claim filed by a competitor. These types of investigations are usually started by the authority itself. The sanction, both economic and reparatory, are the highest the authority deemed applicable under the older Antitrust Law No. 25,156. There have been other similar cases on sales exclusivity, but they are older and occurred in different markets, other than brewery. This case will have an impact over both the brewery market as well as other similar types of markets,” said Miguel del Pino.

In this case, the National Competition Authority took measures to make sure others are dissuaded from following in Qulimes’ footsteps. Those measures include precluding Quilmes from any type of formal or informal commercial agreement with points of sale aimed at generating vertical restrictions on marketing channels so as to secure sales exclusivity, position its product as the first product of choice, eliminate competitors from menus, tabletop displays, or similar settings, or limit the display of competitor products through exclusive shelf and endcap display agreements, among others.

In addition, Argentina’s competition enforcer established that Quilmes must keep its beer marketing strategy separate from that of the rest of the beverages it distributes. It also established that the exclusive advertising and promotion agreements for its beer brands must have a maximum duration of three years with the possibility of early termination after the first year and without automatic renewals. These agreements must not prohibit the sale of competitor beer products or establish priority product offer orders. In addition, they must allow the inclusion of competitor products in menus and tabletop displays.