The world’s largest beer company, Anheuser-Busch InBev (AB InBev), did not breach conditions in its 2016 merger with SABMiller (SAB) through its exclusive branding rights with liquor outlets, the country’s top competition authority said on Tuesday.
This follows allegations to the contrary by JSE-listed alcoholic beverages company Distell.
In terms of the conditions of the 2016 merger between AB InBev and SABMiller, the new entity could not preclude or induce liquor outlet owners from offering space to its competitors.
Distell, owner of the Amarula, Savanna and Hunters Dry brands, alleged that AB InBev concluded exclusive contracts that prevented liquor outlet owners from offering advertising space to competitors.
Distell, which laid a complaint with the country’s antitrust watchdog, the Competition Commission, in November 2016, alleged that AB InBev offered incentives such as cash payments, refurbishment of outlets, the installation of fridges and the installation of flat-screen television and audio equipment in return for exclusive promotional rights in the outlets.
But in its ruling, the Competition Tribunal said AB InBev had not breached the merger conditions. It said, however, that the removal of competitor advertising materials from outlets by AB InBev’s representatives could be in breach of other laws.
Distell had also alleged that AB InBev breached the merger conditions by entering into sponsorship agreements with sports bodies, event organisers and stadium owners to market and sell its products during events.
The tribunal ordered the Competition Commission to reinvestigate AB InBev’s arrangements with sports stadiums related to the sale of its products.
Distell spokesperson Dennis Matsane said: “We welcome the ruling by the Competition Tribunal as an important step in our efforts to get Distell products in stadiums. We will now await the outcome of an investigation by the Competition Commission as directed by the tribunal.”
Distell had told the tribunal that agreements with stadiums in the country barred those facilities from granting other liquor companies marketing and promotional space.
Distell singled out a sponsorship agreement between SABMiller and Western Province Professional Cricket relating to matches played at Newlands cricket stadium in Cape Town. The agreement was concluded on December 1 2015.
As a result of the contract, SABMiller was granted exclusive “pouring rights” at all domestic cricket matches, all international one-day cricket matches and all Test matches. Pouring rights is exclusive permission granted to a manufacturer to control beverage distribution at a venue.
But in its submission, the commission said this practice did not breach the conditions. It said Distell’s allegations did not trigger a need for an investigation.
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