In Germany the scandal of illegal beer cartel is widening.
Files of the investigation by the Federal Cartel Office in Germany show that leading breweries illegally arranged to raise prices of their premium beer brands, reported the German news magazine Focus.
Bosses of large breweries, the producers of the so-called “TV beers” in the country, have admitted to Federal investigators that they made agreements to raise prices via telephone or at the sidelines of industry meetings. The interrogation of Volker Kuhl, head distribution of the Veltins brewery, excavated that during his 17-year long tenure in Veltins large breweries would pass the price-rising agreements along to smaller producers. “Then it often came to a branch-wide beer price increase”, he was reported as saying.
While details of the investigation into the alleged beer cartel have been emerging for some time, the latest reports highlight the depth of the illegal activities. It is becoming obvious that the alcohol industry has been using illegal tactics for almost two decades.
The Bitburger Brewery Group and leaders of the brewery association in the country’s most populous state, North Rhine-Westphalia, apparently gave similar revelations.
The companies involved now face fines in the hundreds of millions of euros, Focus reported.
Anheuser Busch InBev, Bitburger and other “TV beers” like Beck’s, Krombacher, Warsteiner, Paulaner, Radeberger and Erdinger are members of the German Brewers Association, that is itself member of the Brewers of Europe. It is crucial to keep this in mind, that many of these breweries are not only operating in Germany but are engaged in heavy and agressive lobbying the decision-makers in the EU and other (European) countries.
Therefore this scandal shows the hypocrisy of the alcohol industry only too well: while they are fighting with all means possible the introduction of the minimum unit price for public health reasons in England and Scotland, they apparently have no problems illegally arranging prices – which increases their profits and puts pressure on smaller, more local breweries – in Germany over almost 20 years.
The alcohol industry often also argues that regulations of alcohol that protect and promote public health are detrimental to the free market and the free flow of (their) goods. But I think that cases like the German one show that also this argument is hot air from an industry that does not care for free markets and only for any mechanism that increases and drives the maximization of profits. Fixing prices over a period of time that is longer than many of the users of their products surely goes against any free market.
And lastly I want to point out that this case serves as an example to dismantle another argument of Big Alcohol, namely that “Beer serves Europe“. The brewers are masters in promoting numbers about how much beer contributes to the European economy, or to the German culture or to the Danish labor market – you name it. However, all they care about is profit maximisation and not any of the other things they want us and our politicians to believe. Squeezing out smaller, local breweries is surely not serving anybody but Big Alcohol. And maximizing profits no matter the laws and regulations in countries like Germany or elsewhere; no matter the huge negative societal and public health impact of beer.
For me this means that the current scandal of illegal activity by German alcohol brewers is widening and has a European and global dimension. Surely decision-makers are provided a first hand example to see the real face of Big Alcohol.
For further reading:
Der Focus article August 18, 2013
The Telegraph article August 20, 2013
IOGT International page on Big Alcohol tactics and practices