2000/146/EC: Commission Decision of 14 December 1999 relating to a proceeding pursuant to Article 15(1)(b) of Council Regulation No 17 (Case No IV/34.237/F3 - Anheuser-Busch Incorporated - Scottish & Newcastle) (notified under document number C(1999) 4499) (Only the English text is authentic)
Date: 1999-12-14
Institutions: European Commission
Subjects: beer, beverage industry, dominant position, inter-company agreement, restrictive trade practice

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Official Journal of the European Communities

L 49/37

II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 14 December 1999

relating to a proceeding pursuant to Article 15(1)(b) of Council Regulation No 17

(Case No IV/34.237/F3 — Anheuser-Busch Incorporated — Scottish & Newcastle)

(notified under document number C(1999) 4499)

(Only the English text is authentic)

(2000/146/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation No 17 of 6 February
1962, First Regulation implementing Articles 85 and 86 of the
Treaty (1), as last amended by Regulation (EC) No 1216/
1999 (2), and in particular Article 15(1)(b) thereof,

Having given the undertakings concerned the opportunity of
being heard on the matters to which the Commission has taken
objection,

After having consulted the Advisory Committee on Restrictive
Practices and Dominant Positions,

Whereas:

I

that opportunity.

1998 respectively. The parties were given the oppor-
tunity to put forward their arguments orally, but both
parties declined to use
Instead,
Anheuser-Busch Incorporated, Anheuser-Busch Euro-
pean Trade Limited and Scottish & Newcastle submitted
further replies to the Statement of Objections on 27
April and 6 May 1999 respectively. This Decision takes
account of all the responses to the Statement of Objec-
tions.

II

FACTS

A. The undertakings concerned

INTRODUCTION AND PROCEDURE

1. Anheuser-Busch Incorporated

(1)

(2)

This Decision is concerned with the supply of incorrect
information in response to a formal request for informa-
tion under Article 11(3) of Regulation No 17 addressed
Scottish &
to Anheuser-Busch Incorporated
Newcastle plc.

and

(3)

The Commission sent a Statement of Objections to the
parties concerned on 4 August 1998. Anheuser-Busch
Incorporated, Anheuser-Busch European Trade Limited
and Scottish & Newcastle submitted their replies to the
Statement of Objections on 16 October and 27 October

(1) OJ 13, 21.2.1962, p. 204/62
(2) OJ L 148, 15.6.1999, p. 5.

Arlheuser-Busch Incorporated (hereinafter
‘Anheuser-
Busch Inc.’) is the brewing subsidiary of Anheuser-Busch
Companies Incorporated, based in St Louis, United
States of America, and is the world's largest brewing
organisation. Anheuser-Busch International Inc.
is the
company's international beer subsidiary, and was formed
in 1981 to explore and develop markets outside the
United States. Anheuser-Busch European Trade Limited
(ABET), based in London, is the European subsidiary of
Anheuser-Busch International Inc. and was formed to
develop the
sales, distribution and marketing of
Anheuser-Busch brands in Europe. Both Anheuser-Busch
Inc. and ABET are involved in this procedure and replied
1997
to

the Commission's

letter

June

of

3

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22. 2. 2000

(4)

(5)

(6)

(7)

(8)

(9)

pursuant to Article 11 of Regulation No 17 and the
Statement of Objections of 4 August 1998 (‘Anheuser-
Busch’ being used hereinafter where Anheuser-Busch
Incorporated and ABET were both involved in the
procedure.) In the United Kingdom, ‘Budweiser’ beer is
the number one premium packaged lager.

The worldwide turnover of Anheuser-Busch Companies
Incorporated was USD 13,2 billion in 1998 (approxi-
mately EUR 12,3 billion).

2. Scottish & Newcastle plc

The Scottish & Newcastle (S & N) Group comprises three
business divisions: brewing, pub retailing, and leisure.
S & N's brewing business is based principally in the
United Kingdom and Ireland, where it brews and distrib-
utes its own brands and brews and/or distributes a
number of other brands under licence.

In August 1995, S & N acquired the brewing and
distribution business of Courage Limited (hereinafter
‘Courage’). The combined United Kingdom brewing busi-
nesses trade under the name Scottish Courage. These
brewing activities represent 28 % of the UK beer market
in volume production terms. S & N is the largest brewer
in the United Kingdom.

S & N's worldwide turnover for the year ended 3 May
1998 was GBP 3,352 billion (approximately EUR 5,06
billion).

B. Case history

On 24 February 1992, the Commission received a noti-
fication pursuant to Articles 2 and 4 of Regulation No
17, by Anheuser-Busch and Courage, of agreements
concerning the brewing, distribution and marketing of
Budweiser beer in the United Kingdom. On 20 July
1993, the Commission received copies of the agree-
ments as amended by the amending agreement of 14
May 1993.

Following the sale of Courage's brewing business to
S & N in August 1995, the Commission wrote to S & N
on 11 January 1996 for confirmation of the continued
operation of the brewing and/or purchase and distribu-
tion agreements between Courage and third parties. By
letter of 9 February 1996, S & N informed the Commis-
sion that revised arrangements had been entered into
between Courage and Anheuser-Busch Inc. in May 1995,
that these new arrangements were novated to S & N
(entered into by S & N, by way of a novation) on
completion of the Courage acquisition in 1995 and that
the Commission would be formally informed of the new
arrangements shortly.

(10)

In response to a telephone conversation initiated by the
Commission, S & N, by letter of 14 March 1997,
informed the Commission that the relationship between
Anheuser-Busch and S & N remained governed by the
‘original agreements of which the Commission was advi-
sed’ in S & N's letter of 9 February 1996, that is to say,

the 1995 Agreements, and that those agreements were
still in the process of renegotiation. It was anticipated
that
this process would be completed within two
months. Under those ‘original agreements’, ABET and
S & N each controlled 50 % of the Stag brewing joint
venture in Mortlake, south-west London, which brews
and packages Budweiser beer for sale in the United
Kingdom. S & N would then distribute Budweiser beer
only to the United Kingdom on-trade beer market.

By letter of 3 June 1997, the Commission services made
a formal request for information pursuant to Article
11(3) of Regulation No 17 addressed to Anheuser-Busch
Inc. and to S & N, and notified to ABET. In the letter the
the
Commission
following:

questions,

including

asked

13

Please give full details of any further changes

‘(3)
to the agreements since the novation to S & N’

By letter of 2 July 1997, S & N and Anheuser-Busch
gave a joint reply to the Commission's request for infor-
mation of 3 June 1997. By this letter, the Commission
was informed that the relationship between Anheuser-
Busch Inc., ABET and S & N remained governed by the
May 1995 agreements and that these agreements were
still in the process of renegotiation, which was expected
to finish in July 1997.

By the same letter, the Commission was informed, in
relation to question 3 contained in the Annex to the
letter of 3 June 1997, that: ‘There have been no further
changes in the agreements since the novation [from
Courage Limited to S & N]’.

By the same letter, the Commission received 18 docu-
ments concerning the revised arrangements entered into
in May 1995.

By letter of 17 December 1997 (hereinafter, the ‘warning
the Commission services notified Anheuser-
letter’),
Busch and S & N that
it had reached a preliminary
assessment of the notified agreements as to their compa-
tibility with Article 85 (now Article 81 ) of the EC
Treaty. The Commission was of the opinion that the
Beer Supply Agreement of 6 May 1995 contained
restrictions contrary to Article 81 of the EC Treaty.
These included Article 7 (and schedule 2) of the Beer
Supply Agreement concerning the marketing and posi-
tioning of the Budweiser beer in the United Kingdom.

By letter of 16 February 1998, Anheuser-Busch and
S & N gave a joint reply to the warning letter. By the
same letter they informed the Commission that copies of
the revised arrangements (as amended in July 1997)
would be sent the same day by hand to the Commission.
The Commission received a folder, containing 34 docu-
ments, on 16 February 1998.

(11)

(12)

(13)

(14)

(15)

(16)

(17) Document No 12 of this folder contained a copy of two
letters dated 27 and 28 February 1997, both from
Anheuser-Busch to Scottish Courage Limited.

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(18)

The letter of 27 February 1997 entitled ‘Budweiser
marketing guidelines’ refers to an understanding between
Anheuser-Busch and S & N regarding guidelines for the
positioning and marketing of Budweiser in the United
Kingdom. Attached to the letter, as schedule A, certain
guidelines are set forth by Anheuser-Busch. The letter
states, first, that Anheuser-Busch has communicated the
Budweiser marketing guidelines, contained in schedule
A,
to its major brewer-wholesaler customers in the
United Kingdom, and intends to ‘take appropriate steps
to assure compliance with the Budweiser marketing
guidelines in all material respects’. Secondly, the letter
states that Anheuser-Busch ‘reserves the right to amend
the Budweiser marketing guidelines at its sole discretion
at any time and from time to time. Anheuser-Busch shall
promptly communicate to Scottish Courage any amend-
ments to the Budweiser marketing guidelines’. Thirdly,
the letter states that ‘Scottish Courage hereby acknowl-
edges receipt of the Budweiser marketing guidelines and
pledges to use its reasonable efforts to ensure compli-
ance with the Budweiser marketing guidelines by its
sales staff and customers’. The content of the letter was
signed ‘agreed and accepted’ by Scottish Courage
Limited.

(19) On 18 March 1998, the Commission met representa-
tives of Anheuser-Busch and S & N to discuss
the
Commission's warning letter and the joint response of
the parties.

(20)

By letter of 23 April 1998, the Strategy Director of
S & N responded to informal requests for information
the 18 March 1998
made by the Commission at
meeting. He also drew to the Commission's attention the
Budweiser marketing guidelines (described in recitals 17,
18 and 19). He noted that:

‘you may wish to consider the marketing guidelines
issued by A-B after
the supply agreement was
executed but which form an integral part of that
agreement. These should form part of the agreement
pack sent to you and are also enclosed with this
letter’.

(21)

The Commission issued a second warning letter on 13
July 1998, the core of which concerned the marketing
discussion with the
guidelines. After
Commission concerning
guidelines dated 27
February 1997, the parties replaced them by revised
guidelines in December 1998.

subsequent
the

III

LEGAL ASSESSMENT

Introduction

(22) Under Article 15(1)(b) of Regulation No 17,

the
Commission may by decision impose on undertakings
fines where, whether intentionally or negligently, they
supply incorrect information in response to a request
made pursuant to Article 11(3).

(23)

By letter of 3 June 1997, the Commission addressed to
Anheuser-Busch Inc. and to S & N (and notified to
ABET), a request for information pursuant to Article 11
of Regulation No 17. The purpose of the request for
information was as described in the request for informa-
tion:

‘to enable the Commission to assess the compati-
bility of the notified agreements that are listed in the
letter with the EC rules of
Annex
the EC
competition,
Treaty in full knowledge of
the facts and their
correct economic interpretation’.

in particular, Article 85 of

to this

(24)

In the letter
including the following:

the Commission asked 13 questions,

Please give full details of any further changes

‘(3)
to the agreements since the novation to S & N’.

A. The parties supplied the Commission with incor-

rect information

1. The Commission's assessment

The reply to question 3 of the request for information
was incorrect. By stating in the reply of 2 July 1997 that
‘there have been no further changes in the agreements
since the novation,’
the parties have omitted the
Budweiser marketing guidelines of 27 February 1997.

These guidelines are, for Community competition law
purposes, an agreement, since they have been issued and
signed by Anheuser-Busch and signed ‘agreed and accep-
ted’ on behalf of S & N. This view is confirmed by the
extract in the letter of 23 April 1998 from Scottish
Courage,
‘you may wish to consider the marketing
guidelines issued by A-B after the supply agreement was
executed but which now form an integral part of that
agreement’. The reference to the word ‘Agreement’ must
in this context refer to the 1995 agreement, because the
guidelines, having been signed in February 1997, predate
the July 1997 agreement.

2. The replies of the parties

2.1. S c o t t i s h & N e w c a s t l e ' s a r g u m e n t s ( 3)

S & N does not contest the facts on which the Commis-
sion's legal assessment is based.

S & N accepts the Commission's assessment
the
parties should have made reference to the Budweiser
marketing guidelines of 27 February 1997 in their
response to question 3 of the Commission's request of 3
June 1997 for information under Article 11 of Regula-
tion No 17.

that

(25)

(26)

(27)

(28)

(3) S & N's reply of 27 October 1998 to the Statement of Objections

and its further reply of 6 May 1999 are jointly dealt with.

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(29)

S & N submits that it regarded the Budweiser marketing
guidelines as part of
their overall arrangement with
Anheuser-Busch from the time of their introduction.

the notion of a bilateral agreement or understanding,
where changes require the assent of both parties.

2.2. A n h e u s e r - B u s c h ' s a r g u m e n t s ( 4)

(36)

(30) Anheuser-Busch does not contest the facts on which the

Commission's legal assessment is based.

(31) Anheuser-Busch does, however, contest the Commis-
sion's legal assessment. Anheuser-Busch submits that the
answer to question 3 in the Commission's request for
information was only incorrect
the Budweiser
marketing guidelines are an agreement and if they repre-
sent a change relative to the 1995 Beer Supply Agree-
ment.

if

The guidelines are not an agreement

(32) Anheuser-Busch submits that the request for informa-
tion was issued in the context of an existing notification,
so as to enable the Commission to assess the notified
agreements. The 1995 Beer Supply Agreement is part of
a complex series of agreements containing binding legal
obligations that set out the terms of the legal relation-
ship between Anheuser-Busch and Courage Limited.

(33) Amongst those agreements, the Beer Supply Agreement
contains contractually binding obligations on S & N to
purchase and distribute Budweiser,
to promote the
Budweiser brand, and to observe certain rules regarding
the marketing of Budweiser. The guidelines were
communicated to S & N in February 1997 completely
separate from the Beer Supply Agreement.

(34)

The guidelines do not constitute a legally binding agree-
ment but are recommendations made by Anheuser-
Busch as to steps which S & N could take in positioning
Budweiser so as to promote its image as a premium
lager. It is precisely because they have a different status
from the Beer supply agreement that they are entitled
‘Recommended Budweiser positioning guidelines’. Since
they are recommendations, the choice whether to adhere
to the guidelines is left entirely to the discretion of
S & N. The guidelines are therefore not a specific agree-
ment with regard to the joint implementation of the
marketing strategy and objectives for the Budweiser
beer.

(35) Not only are the guidelines recommendations and thus
not an agreement for the purposes of Community law;
they do not constitute a contract under English law
either. The guidelines may be revised by Anheuser-Busch
unilaterally at its sole discretion: this is inconsistent with

(4) Anheuser-Busch's reply of 16 October 1998 to the Statement of
Objections and its further reply of 27 April 1999 are jointly dealt
with.

The fact that S & N signed the cover letter to the guide-
lines ‘agreed and accepted’ is not evidence that S & N
accepted any obligations whatsoever. Rather, S & N was
merely
had
communicated its then current brand positioning views
in order to help S & N make its decisions about how to
position the Budweiser beer it sells.

that Anheuser-Busch

acknowledging

(37) Anheuser-Busch's

it

that

intends

statement

to take
appropriate steps to ensure compliance with the guide-
lines in all material respects should not be interpreted as
indicating that Anheuser-Busch would seek to enforce
them in individual cases. This simply meant that, at its
regular meetings with S & N, Anheuser-Busch would
discuss any S & N sales policy which it regarded as
incompatible with the guidelines and thus threatened to
devalue the Budweiser brand. However, all final deci-
sions on how to position Budweiser remained with
S & N. S & N is under no obligation to comply with the
guidelines and is free to disregard them.
In practice,
S & N departs from the guidelines, presumably when it
determines that it is in its commercial interest to do so.
Indeed, on one occasion, in response to comments by
Anheuser-Busch, S & N had specifically referred to the
unenforceable nature of the guidelines.

(38)

(39)

The fact that the guidelines were included in the bundle
of documents sent to the Commission as part of the
response to the December 1997 warning letter does not
imply that they are part of the 1997 agreements or that
clearance or exemption was being sought for them. In
their joint reply, Anheuser-Busch and S & N obviously
sought to provide copies of the 1997 agreements, as the
Commission was unaware of
those agreements and
drafted the warning letter on the basis of the 1995
agreements. Rather than merely providing a copy of the
relevant contracts, for convenience and in order to be as
helpful as possible to the Commission, the parties had
supplied a file containing 34 documents, including the
guidelines and other documents which are not part of
the 1997 agreements.

The guidelines are irrelevant in competition terms. They
are specifically phrased as recommendations and are
non-binding. The Court of Justice, in its judgment of 28
January 1986 in Case 161/84 Pronuptia (5), ruled that
recommendations (even on price)
fall outside Article
81(1). It is noteworthy that following discussions with
the Commission in late 1998, Anheuser-Busch issued
slightly revised guidelines to S & N which the Commis-
sion has provisionally indicated as not falling within the
scope of Article 81(1).

(5) [1986] ECR 353.

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The guidelines are not a change to the 1995 Beer Supply
Agreement

(issued in February 1997) set out any of the terms
governing its relationship with Anheuser-Busch and thus
were not an agreement.

(40) Anheuser-Busch considers that its reply to question 3 of
the Commission's request was,
in itself, correct for a
second reason, namely that the guidelines were not a
‘change to the agreements’, meaning the 1995 agree-
ments. The cover letter to the guidelines makes it clear
that they are in no way a part of or a change to the Beer
Supply Agreement or the associated agreements but
instead have a completely independent status. It would
have been inappropriate to include them in documents
which created legally binding relationships between
Anheuser-Busch and S & N.

(41)

(42)

The fact that the guidelines were not incorporated in the
1997 Beer Supply Agreement, which is a full restate-
ment of the 1995 Beer Supply Agreement incorporating
all amendments to it, and indeed the fact that they were
unaffected by the 1997 renegotiation, shows that they
were not a change to the 1995 agreements and form no
part either of those agreements or of the replacement
1997 agreements.

Further evidence is provided by Clause 20 of
the
Termination Agreement, which identifies those docu-
ments which Anheuser-Busch and S & N considered to
be part of the agreement between them, and provides
that no other document contains any obligations on
either party. Since the Termination Agreement contains
no reference to the guidelines, they cannot be part of the
July 1997 agreements or part of the 1995 agreements or
have the status of those agreements.

S & N's letter of 23 April 1998

(43) Anheuser-Busch is not a party to this letter, which was
written unilaterally by S & N without Anheuser-Busch's
knowledge.

(44)

The letter is not credible, as it was part of an attack on
relationship between S & N and
the
commercial
Anheuser-Busch,
in particular the 1997 Beer Supply
Agreement, and thus contradicts a number of statements
which S & N had made in its joint submission with
Anheuser-Busch that the Beer Supply Agreement falls
outside the scope of Article 81(1).

(45)

The letter contradicts S & N's letter of 14 March 1997 to
the Commission stating that the relationship between
Anheuser-Busch and S & N remained governed by the
‘original agreements’, namely the 1995 agreements,
which implies that S & N did not consider the guidelines

2.3. T h e C o m m i s s i o n ' s r e p l i e s

(46)

It should be noted that both parties concerned do not
contest the facts on which the Commission has relied in
its legal assessment.

(47) Moreover, S & N accepts the Commission's assessment
that
the parties should have made reference to the
Budweiser marketing guidelines of 27 February 1997 in
their response to question 3 of the Commission's request
for information of 3 June 1997.

(48) However, Anheuser-Busch has put forward various argu-
ments to contest the Commission's legal assessment.
Anheuser-Busch's arguments will be dealt with below.

The guidelines are an agreement

(49) Any reference to English law by Anheuser-Busch is irrel-
evant. This case concerns S & N's and Anheuser-Busch's
answer to a letter sent on the basis of Article 11(3) of
Regulation No 17 relating to a notification by the parties
to the Commission under Community competition law.
According to the case-law of the Court of Justice,
in
order for there to be an agreement within the meaning
of Article 81(1), it is sufficient that the undertakings in
question have expressed their joint intention to conduct
themselves on the market in a specific way (see judg-
ments of 15 July 1970 in Case 41/69 ACF Chemie-
farma (6) and of 29 October 1980 in Joined Cases 209 to
215 and 218/78 Heintz van Landewyck (7)).

(50)

(51)

(52)

The Commission cannot accept Anheuser-Busch's view
that the guidelines are mere recommendations and that
the choice as to whether to adhere to the guidelines is
left entirely to the discretion of S & N. By signing the
cover letter to the guidelines as ‘agreed and accepted’,
S & N agreed and accepted the content of the letter as a
whole and was not merely acknowledging the communi-
cation of the guidelines by Anheuser-Busch.

In fact, the last sentence of the letter states: ‘if you are in
agreement with the foregoing please execute the dupli-
cate original of the correspondence and return a copy to
me’.

It is clear from the letters of Anheuser-Busch to S & N
dated 27 and 28 February 1997 that the only inter-
pretation possible is that S & N:

(a) acknowledged the communication of the guidelines
by Anheuser-Busch, and Anheuser-Busch's intention
to ‘take appropriate steps to assure compliance with
the Budweiser marketing guidelines in all material
respects’;

(b) assented to Anheuser-Busch's right to amend the

guidelines;

(6) [1970] ECR 661, at paragraph 112.
(7) [1980] ECR 3125, at paragraph 86.

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(c) acknowledged receipt of the guidelines and pledged
‘to use its reasonable efforts to ensure compliance
with the Budweiser marketing guidelines by its sales
staff and customers’.

(53)

To be sure, the guidelines may be revised by Anheuser-
Busch unilaterally but as S & N pledges to use its reason-
able efforts to ensure compliance, and S & N has agreed
to and accepted those two elements of the letter, S & N
also pledges to ensure compliance with such amended
guidelines as Anheuser-Busch may wish to communi-
cate.

(54) Moreover, it is clear from the letter of 28 February that
Anheuser-Busch did not in fact communicate the guide-
lines unilaterally but had asked S & N for its comments
on draft guidelines:
‘Scottish Courage's commitment is
important to us (...). We look forward to your response
to our draft’.

(55) Anheuser-Busch, in its reply to the Statement of Objec-
tions, now claims that its intention ‘to take appropriate
steps to assure compliance with the guidelines in all
material aspects’ should not be interpreted as ‘indicating
that Anheuser-Busch would seek to enforce them in
individual cases’.

(56)

(57)

(58)

This is wholly unconvincing. S & N has agreed and
accepted Anheuser-Busch's intention and has pledged ‘to
use its reasonable efforts to ensure compliance (...)’.
Moreover, Anheuser-Busch, in its letter of 27 February,
has stressed that S & N's commitment to the guidelines
is important to it. This clearly shows that the guidelines
constitute an agreement between the parties.

That the guidelines are called ‘recommended’ guidelines
is in itself not sufficient to demonstrate that the guide-
lines are not an agreement. Anheuser-Busch's reference
to the ‘Pronuptia’

judgment is therefore irrelevant.

that

In its reply to the Statement of Objections Anheuser-
Busch seems to suggest
the Commission had
accepted that the guidelines did not give rise to real
competition problems. This presentation distorts the real
facts. The Commission was particularly concerned about
the guidelines, and even issued a second warning letter
drawing the parties' attention to it. It was only after the
second warning letter and the following discussions with
the Commission that the parties withdrew the guide-
lines.

(59)

In the light of the foregoing, the Commission disagrees
with Anheuser-Busch, and considers the guidelines to
constitute an agreement for the purposes of Community
law.

The guidelines are a change to the 1995 Beer Supply Agree-
ment

existing notification and to enable the Commission to
assess the notified agreements.
Included in the Beer
Supply Agreement, and specifically Article 7 thereof, are
obligations regarding the positioning and marketing of
Budweiser. As the guidelines imposed further obligations
with regard to the marketing and positioning of
Budweiser beer, they materially changed the relationship
between Anheuser-Busch and S & N as agreed in the
Beer Supply Agreement.

(61)

The question whether or not the guidelines were incor-
porated in the Beer Supply Agreement is wholly irrele-
vant in determining whether they constituted a change
to that Agreement.

S & N's letter of 23 April 1998

(62)

S & N's letter clearly indicates that S & N is and was of
the view that the guidelines alter the overall arrange-
ments between the parties in so far as the marketing and
positioning of Budweiser is concerned. It may also be
noticed that Anheuser-Busch, in its letter of 28 February,
indicated that S & N's commitment to the guidelines was
important to it. It is therefore wholly unconvincing that
Anheuser-Busch in its reply to the Statement of Objec-
tions now accuses S & N of misinterpreting the guide-
lines in S & N's letter of 23 April 1998.

B. The incorrect reply of the parties was negligent

1. The Commission's assessment

(63) As the parties have, apart from failing to supply the
Commission with the guidelines, cooperated with the
Commission constructively, and as the Commission has
no evidence that
the guidelines were intentionally
concealed from the Commission, the conclusion must be
that the incorrect reply to the Commission's request
under Article 11 was caused by negligence.

2. The arguments of the parties

2.1. S & N ' s a r g u m e n t s ( 8)

(64)

S & N deeply regrets the omission from the parties'
response and states that it was an oversight rather than
the result of any intention to mislead the Commission.

2.2 A n h e u s e r - B u s c h ' s a r g u m e n t s ( 9)

(65)

The answer cannot be intentionally incorrect: Anheuser-
Busch did not answer the request for information so as
deliberately to conceal the guidelines from the Commis-
sion.

(60)

The Commission agrees with Anheuser-Busch that the
request for information was issued in the context of an

(8) See footnote 3.
(9) See footnote 4.

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(66) Anheuser-Busch

to

the

furnished

guidelines

the
Commission on 16 February 1998. This was before the
Commission was even aware of the existence of the
guidelines. Anheuser-Busch felt confident that the guide-
lines raised no significant competition problems and
therefore would not have been embarrassed to discuss
them openly with the Commission, as indeed it did after
it had first
the Commission had some
preliminary concerns about them when it received a
warning letter in July 1998. There is therefore no reason
the
for Anheuser-Busch to have wished to conceal
guidelines from the Commission.

learnt

that

(67) Negligence is essentially equivalent to reasonableness.
Thus, if there is a reasonable explanation for the answer
to the request for information, even if it was ultimately
found to be incorrect, it cannot be negligent. Anheuser-
Busch submits that it was reasonable to consider at the
time of giving its answer that the guidelines are neither
an agreement nor a change to the 1995 Beer Supply
Agreement, for the following reasons.

(a) They are very different

in nature from the Beer
Supply Agreement: one is a set of non-binding
recommendations, the other is a set of binding obli-
gations.

(b) The Beer Supply Agreement is designed to formally
regulate the details of supply relationship between
Anheuser-Busch and S & N. The guidelines are issued
for information purposes only.

(c) As the Beer Supply Agreement contains binding
it cannot be changed without
legal obligations,
another
formal agreement. The guidelines were
issued by Anheuser-Busch alone and can be changed
unilaterally by Anheuser-Busch.

(d) The guidelines did not change the 1995 Beer Supply
Agreement, as is evidenced by the fact that they
were not incorporated into the 1997 Beer Supply
Agreement.

2.3. T h e C o m m i s s i o n ' s r e p l i e s

(68)

The Commission does not allege that the answer to its
request for information was intentionally incorrect.

(69)

(70)

The various arguments put forward by Anheuser-Busch
as proof of its submission that it was reasonable at the
time of giving its answer to suppose that the guidelines
were neither an agreement nor a change to the 1995
Beer Supply Agreement, have been addressed.

The Commission's conclusion as regards the nature of
the guidelines is perfectly in line with the case-law of the
Courts of the European Communities. As both parties
should have ready access to legal advice, the Commis-
sion disagrees with Anheuser-Busch's claim that it was

reasonable not to have informed the Commission of the
guidelines following its formal request for information.

C. Article 15(1)(b) of Regulation No 17

1. The Commission's assessment

(71)

including the guidelines in the reply to the
By not
request for information, the proper investigation of the
file has been hindered:
the assessment
made in the warning letter issued by the Commission on
17 December 1997 could not build on the parties'
specific agreement, as indicated in the guidelines, with
regard to the joint implementation of the marketing
strategy and objectives for Budweiser beer.

in particular,

(72)

In accordance with Article 15(1)(b) of Regulation No 17,
a fine is appropriate, in view of the following considera-
tions.

(a) Supplying incorrect information to the Commission
has a serious impact on the conduct of a case and, in
particular, on the approach of
the Commission
outlined in the warning letter.

(b) Anheuser-Busch Inc.

is the largest brewer in the
world and S & N is the largest brewer in the United
Kingdom; and both have ready access to legal advice.

2. The arguments of the parties

2.1. S c o t t i s h & N e w c a s t l e ' s a r g u m e n t s ( 10)

(73)

S & N hopes that in the circumstances the Commission
will feel able to deal with the matter with a degree of
leniency and conclude the procedure without the impo-
sition of a fine.

2.2. A n h e u s e r - B u s c h ' s a r g u m e n t s ( 11)

(74) Anheuser-Busch submits

believe that
following factors should be borne in mind.

it has

that although it does not
the

infringed Article 15(1)(b),

(a) This is not a case where the parties have tried to
conceal a document from the Commission. Quite
the contrary: the Commission learned of the guide-
lines because the parties gave them voluntarily to the
Commission.

(b) Anheuser-Busch discussed openly and constructively
with the Commission whether the guidelines might
have had competition implications. Those discus-
sions led to Anheuser-Busch's issuing slightly revised
guidelines. The Commission has given its prelimi-
nary opinion that the revised guidelines fall outside
the scope of Article 81(1). In all other respects as
well, Anheuser-Busch has fully cooperated with the
Commission.

(10) See footnote 3.
(11) See footnote 4.

L 49/44

EN

Official Journal of the European Communities

22. 2. 2000

2.3. T h e C o m m i s s i o n ' s

r e a s o n i n g a s

t o t h e

HAS ADOPTED THIS DECISION:

f i n e s

(75) According to Article 15 (1)(b) of Regulation No 17 the
Commission may by decision impose on undertakings
or associations of undertakings fines from EUR 100 to
EUR 5 000 where,
they
supply incorrect information in response to a request
made pursuant to Article 11(3) of that Regulation.

intentionally or negligently,

Article 1

Anheuser-Busch Incorporated and Scottish & Newcastle plc
have infringed Article 15(1)(b) of Regulation 17 by negligently
supplying incorrect information in response to a request made
pursuant to Article 11.

(76)

supply of

The infringement which is the subject of this Decision is
the negligent
information by
Anheuser-Busch and S & N,
through their failure to
submit the Recommended Budweiser positioning guide-
lines in response to a formal request for information
made pursuant to Article 11(3) of Regulation No 17.

incorrect

(77) As the Commission is dependent on the parties for a
notification for the supply of correct information on the
basis of which the Commission is able to assess the
notified agreements, the supply of incorrect information
to the Commission has a serious impact on the conduct
of a case and, in particular in this case, the approach of
the Commission services outlined in the warning letter.

(78) Anheuser-Busch Inc. is the largest brewer in the world
and S & N is the largest brewer in the United Kingdom
and both have ready access to legal advice.

(79)

For the reasons set out in recital 72 the Commission
considers the imposition of a fine to be appropriate.

(80) However,

the Commission has no evidence that

the
parties concealed the guidelines intentionally and the
parties have, apart from the infringement, cooperated
constructively and openly with the Commission.

(81)

(82)

(83)

(84)

It should also be noted that the parties supplied the
Commission with the guidelines voluntarily, on 16
February 1998. The Commission had not asked for the
guidelines and was, at that time, not even aware of their
It was thus only through the information
existence.
supplied by the parties themselves that the Commission
discovered the guidelines.

It follows that there was only a limited period of time
during which the Commission was not in the possession
of the correct information: between 2 July 1997 and 16
February 1998. The supply of incorrect information by
the parties should not in this case, therefore, be regarded
as a major infringement.

For these reasons, the Commission considers it appro-
priate to fix the amount of the fines at EUR 3 000 for
Anheuser-Busch and EUR 3 000 for S & N.

Since ABET is a 100 % subsidiary of Anheuser-Busch
International Inc., which in turn is a 100 % subsidiary of
Anheuser-Busch Inc. and since moreover both ABET and
Anheuser-Busch Inc. played a part in these proceedings,
the Commission considers
that both ABET and
Anheuser-Busch Inc. are jointly and severally liable for
the fine,

Article 2

A fine of EUR 3 000 is hereby imposed on Anheuser-Busch
Incorporated.

A fine of EUR 3 000 is hereby imposed on Scottish &
Newcastle plc.

Article 3

The fines imposed under Article 2 shall be payable in euro
within three months of the date of notification of this Decision
to the following bank account of the European Commission:
310-0933000-43,
Lambert, Agence
Européenne, Rond-Point Schuman 5, B-1040 Brussels.

Bruxelles

Banque

After the expiry of that period, interest shall automatically be
payable at the rate applied by the European Central Bank to its
repo operations on the first working day of the month in
which this Decision was adopted, plus 3,5 percentage points,
namely 6,5 %.

Article 4

This Decision is addressed to:

Anheuser-Busch Incorporated
One Busch Place
St Louis, MO 63188
USA

Anheuser-Busch European Trade Limited
8 Devonshire Gardens
Cutler's Gardens
London EC2M 4LP
United Kingdom

Scottish & Newcastle plc
50 East Fettes Avenue
Edinburgh EH4 1RR
United Kingdom

This Decision shall be enforceable pursuant to Article 256 of
the Treaty.

Done at Brussels, 14 December 1999.

For the Commission

Mario MONTI

Member of the Commission