SEPTEMBER 16, 2021

The Secretariat of Domestic Trade imposed an AR$150,000,000 fine on Quilmes for abuse of dominance.



Competition & Antitrust Department Report | The Secretariat of Domestic Trade imposed an AR$150,000,000 fine on Quilmes for abuse of dominance

Dear Sir or Madam,

On August 24th, 2021, the Secretariat of Domestic Trade imposed a fine of AR$150,000,000 on Cervecería y Maltería Quilmes SAICAyG (“CMQ”) for abusing its dominant position and infringing the Argentine Antitrust Law.

The investigation that led to the fine began in 2016 after a denunciation from its competitors Compañía Cervecerías Unidas S.A., Compañía Industrial Cervecera S.A. and Otro Mundo Brewing Company S.A.

During the investigation, the Argentine Competition Commission (“ACC”), found an exclusionary abuse of dominance from CMQ, that had developed various loyalty strategies towards its clients, with the aim of establishing exclusive points of sale for its beers, thus creating a vertical market foreclosure for its current and potential competitors [1].

The practices that led to the fine include:

1. Exclusive sale of beers and other CMQ products in points of sale in exchange for cash compensation, advertising, furniture, and discounts over products distributed by CMQ.
2. Requiring exclusive and preferential venues in supermarkets shelves, self-service markets, and markets that exceeded its market shares in exchange for discounts and promotions.
3. Exclusivity in the use of fridges for stores.

Considering CMQ’s position in the beer market in Argentina [2], as well as the duration of the practices, the CNDC concluded that such practices did not only generate a strong entry barrier for new competitors but could also cause the exit from the market of smaller competitors that would not be able to compete for these stores in the same conditions as CMQ.

In addition to the AR$150 million fine, the CNDC set forth different corrective measures to terminate the objected practices, including the following:

• CMQ will not be able to enter into agreements with the points of sale with the purpose or effect of generating vertical restrictions, such as exclusivities or the first option of its products; eliminate competitors from lists or menus; limit the exhibition of products of competitors through an exclusive shelf or corner agreements, among others;
• CMQ shall maintain an independent commercialization strategy separating its beers from other beverages brands, (i.e. it will not be able to establish crossed discounts between both groups of products, nor tie the sale of a product to the purchase of another).
• The exclusive advertising and promotion agreements of CMQ’s beer brands -through the provision of furniture, billboards, or others- shall have a maximum term of three years, with the possibility of termination after the first year and without automatic renewal; shall not forbid the sale of competitors’ products nor include a preference order in the offering of products; and will allow the inclusion of competitors’ products in the lists and menus.

Although CMQ can appeal the decision, this case confirms the CNDC’s point of view regarding certain types of contractual relationships (exclusivities, conditional/loyalty discounts, incentives) when one of the parties has a dominant position or considerable market power. Thus, it is important to thoroughly analyze agreements including these types of provisions when they are proposed by a company with high market shares or considerable market power.

[1] The same practices were investigated, verified, and sanctioned by the antitrust authorities of other countries such as Brazil, Mexico, Uruguay, Colombia, Chile, Dominican Republic, Greece, etc.
[2] During the investigation, it was found that CMQ had an average market share of almost 70% of the beer market in Argentina, with the brands: Quilmes, Brahma, Andes, Budweiser, Stella Artois, Patagonia, Corona, Negra Modelo, Beck’s, Hoegaarden, Leffe, and Báltica, in addition to the exclusive distribution of other types of beverages like Pepsi, Gatorade, RedBull, Eco de los Andes, Glaciar, Nestlé Pureza Vital y Awafruit, which also allowed CMQ to leverage its market power.

Please, do not hesitate to contact us should you require any further information.


Agustín Waisman
Tomás López Bisso