By Margit Feher
BUDAPEST--Hungary's competition authority Thursday ordered the
largest breweries operating in Hungary to reduce their beer sales
via exclusive contracts to pubs, hotels, restaurants and other
catering venues so that smaller firms can gain market share.
The largest breweries--the local arm of Dutch brewer Heineken NV
(HEINY), London-based SABMiller PLC (SBMRY) and Molson Coors
Brewing Co.(TAP)--have agreed to comply, so the authority, GVH,
decided no infringement was committed and didn't impose any
fines.
The companies weren't available immediately to comment.
Based on its investigation of the big breweries' contracts
between 2007 and 2013, GVH established that the firms, together
with brewer Pecsi Sorfozde Zrt., controlled by Ottakringer
Getraenke AG (OTS.VI) of Austria, commanded about 44% of beer sales
in Hungary's catering sector. With Carlsberg A/S (CABGY), which has
no brewery in Hungary but is a major importer, these five biggest
participants share up to 95% of the market, GVH said.
"As a result, neither imported products nor smaller breweries
could obtain market share from the big breweries because of the
exclusive contracts," GVH said.
The competition authority has ordered that Heineken Hungaria
Sorgyarak Zrt., Borsodi Sorgyar Kft., a unit of Molson Coors, and
Dreher Sorgyarak Zrt., a subsidiary of SABMiller, should reduce
their beer sales volumes sold under exclusive contracts in two
steps by nearly 20% by the end of 2017.
As a result of the complicance, market share will fall by about
4% for Heineken and 5% each for the other two firms, resulting in
an overall drop in their joint share of the catering market to 30%
from 44%, GVH said. Pecsi's market share has proved to be small,
requiring no action, the authority added.
Beer sales totaled less than 6 million hectoliters in Hungary in
2012, down from 7 million in 2007. Sales to pubs and other catering
venues accounted for about two-thirds of the sales volume. Revenues
of the five largest brewers from their locally made beer and
including Carlsberg's beer imports totaled an estimated 139.67
billion Hungarian forints ($498.7 million) in 2012.
Write to Margit Feher at margit.feher@wsj.com; Twitter:
@margitfeher
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