Notice published pursuant to Article 19(3) of Regulation No 17 concerning notification COMP/A37.904/F3 — Interbrew (Text with EEA relevance)
Date: 2002-11-20
Institutions: European Commission
Subjects: beverage industry, contract, exclusive purchasing agreement, trade agreement

C 283/14

EN

Official Journal of the European Communities

20.11.2002

Notice published pursuant to Article 19(3) of Regulation No 17 (1) concerning notification
COMP/A37.904/F3 — Interbrew

(2002/C 283/05)

(Text with EEA relevance)

I. THE NOTIFICATION

1. On 30 June 2000 Interbrew Belgium NV (hereafter
‘Interbrew’) notified pursuant to Article 4 of Council Regu-
lation No 17 its brewery contracts concluded with
operators of Horeca outlets (2)
in Belgium. The notified
brewery contracts can be divided in five different types:
concession
loan
agreements, franchise agreements and the ‘afstand open-
ingstaks’ agreements. Each of these agreements contains
a tie for beer, that will be described below.

agreements,

agreements,

(sub)lease

2. Interbrew has requested a negative clearance under Article
81(1) of
the EC Treaty or an individual exemption
pursuant to Article 81(3) of the EC Treaty. The notification
was amended by Interbrew in November 2001 and in June
2002.

II. INTERBREW

3. Interbrew is the largest Belgian brewer. Interbrew’s most
important brands in Belgium are Jupiler and Artois (pils),
Hoegaarden (wheat beer) and Leffe (abbey beer). All four
brands are in the top ten of most sold brands in Belgium.

4. Interbrew NV is

the parent company of

Interbrew.
Interbrew NV is a public company based in Brussels and
runs operations in 20 countries, across North America,
western and eastern Europe and Asia.

III. THE MARKET

5. This case concerns the distribution of beer to the Horeca

market in Belgium.

6. Brewers sell roughly 60 % of all their beer in the Belgian
Horeca sector. The remaining 40 % are sold in the
take-home
In the
Horeca sector, about 65 % of all beer consumed is
draught beer (as opposed to beer in bottles or cans).

(supermarkets,

shops,

sector

etc.).

sector. The

the Belgian Horeca

7. Interbrew holds an overall market share of roughly 56 %
of
second brewer
Alken-Maes (now part of Scottish & Newcastle, previously
part of Danone) has around 13 % of this market. The share
of the third largest brewer Haacht is somewhere around
6 %. These three brewers all have a pils beer which
turnover. The fourth brewer,
generates most of
Palm, who holds roughly 7 % of
the market, achieves
most of its sales with an amber beer (although it also
has a pils beer in its portfolio). Together, the four main

their

(1) OJ 13, 21.12.1962, p. 204/62.
(2) Hotels, restaurants and cafés.

brewers represent around 80 % of
market.

the Belgian Horeca

and [< 20 000] pubs

8. Most of the 52 000 Horeca outlets in Belgium are pubs
Interbrew beers.
(35 500)
to a
However, only [11 000-13 000] pubs are subject
non-compete obligation and sell nothing but Interbrew
beers.

sell

9. In 1999, Interbrew’s beer turnover in the Horeca sector
was 3 382 657 hectolitres. Interbrew estimates that it sold
[30-40] % through outlets which are tied to it by means of
a non-compete obligation.
It bases this estimate on an
average pub output of 100 hl per year. This gives
Interbrew a tied market share in the Horeca sector of
[17-22] %.

10. Almost all of the [11 000-13 000] Interbrew ties are either
loan ties or lease/sublease ties.
In 1999 [8 000-9 000]
were loan ties (i.e. operator of outlet owns his outlet or
rents it from a third party but obtains from Interbrew a
loan of money or material or a bank guarantee). These
loan-tied outlets achieved sales representing a tied market
share of [11-16] %. The remaining [3 000-4 000] outlets
were lease or sublease ties (i.e. operator rents the outlet
from Interbrew which is either the owner or the head
lessee). Their sales correspond to a tied market share of
[4-8] %.

11. Since 1999,

the number of

Interbrew loan and lease/
sublease ties has decreased slightly. Figures on 31 August
2001 give [. . .] loan ties and [. . .] lease ties.

IV. THE AGREEMENTS

1. Loan ties

Interbrew,

the outlet operator

12. The general principle of the loan ties is that in return for a
loan by
a
non-compete obligation for beer. This means that he has
the obligation to purchase all his beer requirements from
Interbrew and is not allowed to resell beers from third
Interbrew’s loan ties cover a wide variety of
brewers.
loans: non-refundable loans, money loans, guarantees and
equipment
is
typically five years.

loans. The duration of

these contracts

accepts

13. In the case of non-refundable loans, Interbrew grants the
operator an amount of money for (re)furbishing the pub.
The publican is not obliged to repay the money as long as
he strictly fulfils the non-compete obligation.

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Official Journal of the European Communities

C 283/15

14. Interbrew also provides money loans to operators. The
borrower will have to repay the loan, but the financial
the loan is provided
benefit
under
rates
interest
than standard bank rates).

for the operator is that
(e.g.
favourable conditions

lower

15. In order to provide the outlet operator with a loan,
Interbrew can also act as an intermediary with banks
and other credit institutions. Often, Interbrew enters into
a financial obligation towards the bank in favour of the
operator:
the loan and/or
contributes to the payment of the interest of the loan.
These are the so-called guaranteed loans.

Interbrew either guarantees

16. The last type of loans are the equipment loans: Interbrew
provides the operator with the equipment he needs (e.g.
beer taps, coolers, furniture, publicity materials etc.). Upon
expiry of the contract, the operator has to return the
equipment to Interbrew in good condition.

2. Lease and sublease ties

17. There are outlets which Interbrew either owns or leases
from a third party. It then leases or subleases the premises
to an outlet operator who in return accepts a non-compete
obligation. These are the so-called lease and sublease ties
(sometimes also called property ties). In line with Belgian
law, the duration of the lease contracts is nine years, which
is renewable for further terms of nine years, up to a
maximum duration of 27 years.

3. Franchises

18. Interbrew has around 20 franchise contracts for either
Leffe pubs, Hoegaarden pubs or Radio 2 pubs. As in the
case of lease or sublease ties, Interbrew mostly owns the
premises of the franchised pub or it is the head lessee of
these premises.

19. In all these cases, Interbrew gives the outlet operator a
concession for the exploitation of the franchise formula.
The operator has
to pay a monthly royalty fee to
Interbrew. Interbrew grants the operator a territorial exclu-
sivity for the franchise formula and provides him with
commercial assistance services.
the operator
accepts a non-compete obligation. The franchisee does
not enjoy an exclusivity for
sold in the
exclusive territory.

In return,

the beers

4. Concessions

20. Interbrew regularly tenders for public contracts to operate
an outlet in cultural centres, sports facilities, recreation
parks etc. The concession is awarded by the public
authority to the brewer or beer wholesaler that offers
the best conditions.

21. If

Interbrew wins

the concession,

into an
to run
agreement with the outlet operator allowing it
the outlet
Interbrew
also provides the equipment (beertaps, coolers, furniture,
etc.). The operator subscribes to a non-compete obligation.

for the period of

the concession.

it enters

22. Interbrew has approximately 100 concession outlets. The
duration of the concession varies from five to 10 years,
sometimes even longer.

5.

‘Afstand openingstaks’

23. According to Belgian statutory law, every outlet operator
must pay an ‘opening tax’ of three times the rental value of
the outlet as estimated by the public administration. When
the brewers or beer wholesalers are the owners or the
head lessees of
they — rather than the
outlet operator — will pay the opening tax.

the property,

24. The payment of the opening tax is valid for 15 years, but
every five years the rental value is re-estimated and the
brewer or beer wholesaler has to pay a surcharge. When
Interbrew decides to terminate the exploitation of
the
is legally obliged to inform the competent
it
outlet,
public authorities.
the
opening tax. However,
if Interbrew transfers the Horeca
outlet to someone else within one year of terminating
the exploitation, the new outlet operator will only have
to pay an opening tax of once the estimated rental value.

It cannot claim back part of

25. In return for this financial benefit (which amounts to twice
a

the
Interbrew imposes
value),
non-compete obligation upon the new outlet operator.

estimated

rental

26. Although in Flanders the opening tax was reduced to zero
on 1 January 2002, there are still Flemish operators that
are tied to Interbrew based on a contract concluded before
this date.

6. The non-compete obligations in the notified contracts

A. The originally notified contracts (30 June 2000)

27. For all

i.e.

loans,

types of brewery contracts,

the original notification contains

leases,
subleases,
franchises, concessions and ‘afstand opening-
staks’
situations,
in
to two exceptions which are
principle (and subject
explained below) unqualified non-compete obligations for
the operator of the outlet. This means that the outlet
operator is obliged to buy all his requirements for beers
as well as other drinks specified in the brewery contract
from Interbrew for the duration of the contract and cannot
resell competing beers or other drinks. In the franchise
agreements,
in addition achieve a
minimum sale of Leffe or Hoegaarden (depending on the
franchise formula) of 25 % of his sales of all beer.

the operator must

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Official Journal of the European Communities

20.11.2002

28. For the loan contracts and ‘afstand openingstaks’ contracts,
the original notification provides for two exceptions. First,
all contracts entered into from 1 March 2001 contain a
non-compete obligation covering draught beer only (so no
beer in bottles and cans nor other drinks) and those
concluded as from 1 June 2001 are terminable annually
by the operator on three months’ notice. Second, for loan
and ‘afstand openingstaks’ contracts entered into after
1 July 2001,
Interbrew changes the non-compete obli-
gation into a minimum purchase obligation by requiring
from the operator that he purchase at least 75 % of his
total beer turnover from Interbrew.

B. The first amendments of

the original notification (November

2001)

29. In November

2001,

Interbrew harmonised

the
its existing loan and
non-compete obligations for all
‘afstand openingstaks’ contracts: (i) the non-compete obli-
gation covers beer only (no other drinks); (ii) the operator
is obliged to purchase at
least 75 % of his total beer
turnover from Interbrew; (iii) the contracts are terminable
annually by the operator on three months’ notice; and (iv)
the penalty for not respecting the minimum purchase obli-
gation (in absolute volume) has been deleted.

30. For all other contracts (lease/sublease ties, franchises and
concessions), the non-compete obligations remained those
described in the original notifications (see paragraph 26
above).

C. The second amendments of the original notification (June 2002)

31. Following discussions with the Commission services,
Interbrew offered further amendments to the originally
notified agreements. These amendments were formally
notified in June-October 2002.

6.1. Loan ties

[11-16] %.

the outlet at

least buys 50 % of

32. As said (see paragraph 10 above), loan ties represent the
largest number of brewery contracts and yield a tied
market share of
Interbrew now accepts to
limit the quantity forcing clause to draught pils, provided
its total beer
that
the
requirements
quantity forcing clause on the operators no longer
covers bottled or canned pils nor does it cover any
other type of beer than pils (e.g. wheat beer, abbey beer,
amber beer), whether draught or bottled. This means that
in future other brewers will be able to have access to
Interbrew’s loan-tied outlets with all their beers, except
draught pils.

In other words,

from Interbrew.

34. When the outlet operator terminates the contract, he/she
to repay the
an early

(or any brewer who takes over) has
outstanding balance of
repayment penalty or other financial compensation (1).

loan without

the

35. In the case of an equipment loan, the operator will have to
either return the equipment in good condition (fair wear
and tear excluded) or buy the equipment for its residual
value, based on a linear depreciation over five years or 60
months.

36. The duration of the loan contracts is maximum five years.
However, Interbrew still has approximately 2 000 money
loan and bank guarantee agreements which it entered into
with operators between 1 January 1997 and 1 January
2000 and which have a duration of 10 years. Interbrew
has committed itself
to terminate the quantity forcing
clause at the latest on 31 December 2006 (i.e. five years
after the end of the transitional period provided for in
Article 12 of Commission Regulation (EC) No 2790/1999).

6.2. Lease and sublease ties

For

these

37. Lease or sublease ties represent a tied market share of
[4-8] % (see paragraph 10 above).
ties,
Interbrew limits the non-compete obligation to all types
of draught beer (pils or any other type) brewed by Interbrew
under its own brands or under a licence agreement. The
amended tie no longer applies to types of draught beer not
brewed by Interbrew (i.e. Trappist). Furthermore, since the
reference to licence agreements in fact only refers to
to existing cooperation agreements
Tuborg and not
under which Interbrew distributes beers
from third
the non-compete obligation no longer applies
brewers,
from Orval, Rodenbach, Van Honsebrouck
to beer
Interbrew has also deleted
(Kasteelbier) or De Koninck.
the minimum purchase obligation (in absolute volume)
for the operator.

38. This means that in future the tied outlet operator will be
free to sell draught Trappist beer and all types of beer in
bottles and cans.

39. If in future, other types of draught beers would appear to
exist that are not brewed by Interbrew, if Interbrew would
it would wish to
start brewing a Trappist beer or if
conclude
third party
brewers, the Commission will reassess the scope of the
amended quantity forcing clause.

agreements with other

licence

33. Moreover, Interbrew now accepts that the operator can
terminate its brewery contract any time, provided the
operator gives a three months’ notice.
Interbrew will
insert a clear reminder of this right to terminate in its
sales conditions featuring on the back of every invoice.

(1) In most term loans, the borrower is not only obliged to pay back
the outstanding capital when he/she repays early, but on top of that
a sum of money to compensate the lender for the fact that the
latter gets his capital back too early and will no longer receive the
expected interest income on it.

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Official Journal of the European Communities

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6.3. Franchises

the franchise formula.

40. For the small number of Leffe or Hoegaarden franchises,
Interbrew will
limit the non-compete obligation to the
type of beer (draught, bottled and canned) that is subject
impose a
of
minimum purchase obligation for this type of beer of
25 % of all beer purchases. For the Radio 2 franchise
system, there will not be any non-compete obligation or
quantity forcing clause.

It will, however,

41. This means that in future any Leffe or Hoegaarden fran-
chisee will be free to purchase and resell any type of beer
(be it draught, bottled or canned) from third brewers, with
the exception of abbey beer for a Leffe pub or wheat beer
for a Hoegaarden pub. A Radio 2 franchisee will be free to
purchase and resell any type of beer from third brewers
(draught, bottled and canned).

42. As stated above (paragraph 18), Interbrew owns most fran-
chised outlets or rents them as head lessee.
Interbrew
reserves itself the right to convert the existing franchise
contracts into a sublease contract.
it will
impose the loosened quantity forcing clause for lease/
sublease contracts without combining it with the 25 %
minimum purchase obligation for the ‘franchise beer’.

In that case,

6.4. Concessions

44. This means that the outlet operator who effectively run the
concession will be free to sell draught Trappist beer and all
other types of beer in bottles and cans.

6.5.

‘Afstand openingstaks’

45. Interbrew has informed the Commission that it will no
longer
impose non-compete obligations or quantity
forcing clauses on outlet operators who take over the
from Interbrew within one year after Interbrew
outlet
has terminated its exploitation.

V. CONCLUSION

In view of the amendments of the notified agreements, the
Commission intends to take a favourable position in respect
of these agreements. Before adopting a favourable position, the
Commission invites third parties to send their observations
within one month of the publication of this notice by mail
to the following address or by fax to the following number
quoting the reference Case COMP/A37.904/F3 — Interbrew:

European Commission
Directorate-General for Competition
Directorate F
B-1049 Brussels
Fax (32-2) 296 98 02.

43. Interbrew will treat the 100 or so concession agreements
the (sub)lease contracts. Where
in the same way as
Interbrew wins
the situation is very
similar to that where Interbrew is the head lessee. It will
appoint an outlet operator as sublessee and the latter will
be subject to the non-compete obligation for lease/sublease
contracts.

the concession,

its observations contain business
If a party considers that
secrets,
it must indicate the passages which in its opinion
ought not to be disclosed on the ground that they contain
business secrets or other confidential material, and state the
reasons. If the Commission does not receive a request with
reasons it will assume that the observations do not contain
any confidential information.

Prior notification of a concentration

(Case COMP/M.2981 — Knauf/Alcopor)

Candidate case for simplified procedure

(2002/C 283/06)

(Text with EEA relevance)

On 12 November 2002 the Commission received notification of a proposed concentration pursuant
1.
to Article 4 of Council Regulation (EEC) No 4064/89 (1), as
last amended by Regulation (EC)
No 1310/97 (2), by which the French undertaking Knauf La Rhénana SAS, belonging to the German
Knauf Group (Knauf), acquires, within the meaning of Article 3(1)(b) of the Regulation, control of the
Swiss undertaking Alcopor Knauf Holding AG (Alcopor) by way of purchase of shares.

2.

The business activities of the undertakings concerned are:

— Knauf manufacture of thermal and acoustic insulation products, gypsum and gypsum products, and

other building materials,

— Alcopor: manufacture of thermal and acoustic insulation products.

(1) OJ L 395, 30.12.1989, p. 1; corrigendum: OJ L 257, 21.9.1990, p. 13.
(2) OJ L 180, 9.7.1997, p. 1; corrigendum: OJ L 40, 13.2.1998, p. 17.