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General Court annuls the €31.66 million fine imposed on Grolsch

The General Court annuls the €31.66 million fine imposed on Koninklijke Grolsch NV, subsidiary of SABMiller, for its participation in a cartel on the Dutch beer market, the court said on Thursday. By decision of 18 April 2007, the Commission imposed fines totalling more than €273 million on the main Dutch brewers2, Heineken NV and its subsidiary – Heineken Nederland BV, Bavaria NV and Koninklijke Grolsch NV, for their participation in a cartel on the Dutch beer market from 27 February 1996 to 3 November 1999.

On that market the brewers sell their beer to end users mainly through two distribution channels: the “on-trade” segment (hotels, restaurants and caf?s), where consumption is on the premises, and the “off-trade” segment (supermarkets and off-licences), where the beer is purchased for consumption at home.

The infringement found by the Commission consisted of the coordination of prices and price increases for beer and the allocation of customers, both in the on-trade segment and in the off- trade segment in the Netherlands, and the occasional coordination of other commercial conditions offered to individual on-trade customers in the Netherlands.

The Commission imposed a fine of €31.66 million on Koninklijke Grolsch NV.

That company subsequently brought an action before the General Court seeking annulment of the Commission’s decision or a reduction in its fine.

Koninklijke Grolsch NV in essence denied that it participated directly in the infringement. It argued that the employees of its wholly-owned subsidiary, Grolsche Bierbrouwerij Nederland BV, attended most of the meetings at issue and that consequently the Commission should not have found that Koninklijke Grolsch NV participated in the infringement but, if appropriate, should instead have attributed liability to it for an infringement committed by its subsidiary.

First of all, the Court considers certain documents concerning the meetings between the companies and concludes that the evidence available to the Commission was not sufficient to establish the direct participation of Koninklijke Grolsch in the cartel.

The Court goes on to observe that where, as in the present case, a decision concerns a number of addressees and raises a problem of attribution of liability for the infringement identified, it must include an adequate statement of reasons with respect to each of the addressees, in particular those of them who, according to the decision, must bear the liability for that infringement. Thus, in the case of a parent company held liable for the conduct of its subsidiary, such a decision must contain a detailed statement of reasons for attributing the infringement to that company.

According to settled case-law, in the specific case of a parent company holding 100% of the capital of a subsidiary which has committed an infringement of the competition rules, there is a rebuttable presumption that that parent company actually exercises decisive influence over the conduct of its subsidiary.

In those circumstances, it is sufficient for the Commission to show that the entire capital of a subsidiary is held by the parent company in order to presume that the parent company exercises decisive influence over the subsidiary’s commercial policy. The Commission will then be able to hold the parent company jointly and severally liable for payment of the fine imposed on the subsidiary, unless the parent company, which has the burden of rebutting that presumption, adduces sufficient evidence to prove that its subsidiary acts autonomously on the market.

The Court states that, in the present case, the decision treated the parent company, Koninklijke Grolsch NV, and the Grolsch group as one and made no mention of the economic, organisational and legal links between the parent company and its subsidiary, whilst nowhere in the statement of reasons was the subsidiary’s name mentioned. The Commission therefore failed to explain the reasons which led it to determine the legal person responsible for running the undertaking at the time when the infringement was committed, so as to enable that person to answer for the infringement or, as the case may be, rebut the presumption that the parent company actually exercised decisive influence over the conduct of its subsidiary.

The Court finds that the Commission failed to explain, in the decision, its reasons for attributing to Koninklijke Grolsch NV the conduct of its subsidiary, which followed from the participation of the subsidiary’s employees in the meetings at issue. It thus denied the parent company any opportunity to reverse the presumption and thereby challenge the merits of that attribution before the Court and did not enable the Court to exercise its power of review in that regard.

Consequently, the Court decides to annul the Commission’s decision in so far as it concerns Koninklijke Grolsch NV.

20 Sep. 2011

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