CADE settles in proceeding assessing alleged anticompetitive conducts by Ambev
The Administrative Council for Economic Defense (CADE) signed, on 10 June 2015, a Cease and Desist Agreement (TCC in its acronym in Portuguese) with Ambev in a proceeding assessing an alleged infringement to competition stemming from sales exclusivity practices and from the company’s refrigeration policies. (Administrative Proceeding no. 08012.002608/2007-26).
The TCC was proposed and negotiated within CADE’s General Superintendence. Ambev agreed to limit the amount of beer sales points to 8%, which will be counted by regions defined in the agreement that may have some type of exclusive relation with the company. Such exclusivity can derive either from specific contracts or from the lack of other refrigeration capacity besides Ambev’s equipments.
In the decision that presented the TCC for approval by CADE’s Tribunal, Commissioner Ana Frazão noted that this percentage would be a reasonable limit and would not harm the competition environment, since at least 92% of the sales points that already sell Ambev brands would be free to sell any rival brand.
Ambev also agreed to limit to 10% the sales volume of the points with which the company holds a relationship of exclusivity. According to Commissioner Frazão, this measure aims at addressing the concerns regarding the possibility that Ambev would focus its efforts in the sales points of a larger volume, after being prevented by the TCC from signing exclusivity agreements only in quantitative terms.
By the agreement signed, Ambev also agrees to change its refrigeration policy. The TCC forbids the company to compel sales points to sell only one Ambev beer brand in each refrigerator and establishes uniform criteria for minimum sales for each sales point. Furthermore, the company is prohibited to demand exclusivity from the sales points in exchange for lending the refrigerator.
CADE’s Tribunal understood that the TCC effectively addresses all the concerns identified, as well as imposes relevant sanctions in cases of non-fulfillment of obligations. For CADE, the agreement is opportune and convenient because it immediately establishes criteria for strengthening competition in the market.
The case started after a complaint presented by Kaiser. With the signature of the TCC, the proceeding will be suspended until CADE declares the fulfillment of all commitments.