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AfricaMoney | August 22, 2017

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Mauritius’ Phoenix & Stag Beverages slapped with Rs 26.87 mn penalty: CCM

Mauritius’ Phoenix & Stag Beverages slapped with Rs 26.87 mn penalty: CCM

It was noted that there was a strong possibility that the two brewing companies had agreed to share the beer market in Mauritius and restrict the supply of beer market in the island economy.(Image: Keehuachee Blog)

The Executive Director of the Competition Commission of Mauritius (CCM), Kiran Meetarbhan, has recommended to the Commission that financial penalties be imposed on Phoenix Beverages Ltd and Stag Beverages Ltd in view of their having colluded over beer supply in Mauritius.

It was noted that there was a strong possibility that the two brewing companies had agreed to share the beer market in Mauritius and restrict the supply of beer market in the island economy.

This would be in addition to the imposition of directions pursuant to a potential collusive agreement that may exist between the two brewing companies, the CCM mentioned in its media release.

Phoenix Beverages Ltd has been subjected to a financial penalty for breach of provisions under section 41 of the Act of Rs 20.30 million, subject to its continued co-operation with the CCM and compliance with its undertakings.

On the other hand, a financial penalty of Rs 6.58 million was imposed on Stag Beverages Ltd for breach of the provisions of section 41 of the Act.

The CCM ordered that the respective financial penalties must be paid within 25 working days of this decision.

Such decisions were taken by three Commissioners, who fully endorsed the recommendations of the Executive Director and decided that there has been an agreement between the two brewing companies with the object and/or effect of sharing the beer market in Mauritius and restricting the supply of beer market of Mauritius.

The CCM considered that the breach is of a serious nature and that the agreement may have already caused significant harm to competition.

Phoenix Beverages Ltd will seek the clearance of the CCM prior to any increase in prices when such increase is not attributable to costs for a period of 4 years; it will not stop the commercial distribution of any brands of it beer for a period of two years without the authorization of the CCM; and finally, it will provide certain resellers with space in its coolers for a period of two years.

The Commission has also declared the provision of the agreement in so far as it makes a condition to the agreement the exit of Stag Beverages Ltd from the beer market of Mauritius and the dismantling of the plant of Stag Beverages Ltd from Mauritius, prohibited and void, notes the CCM communique.

The Commission has also imposed additional directions to limit communications between Stag Beverages Ltd and Phoenix Beverages Ltd.

Kiran Meetarbhan highlighted in the communiqué published on the CCM’s website that they hope that by imposing several directions on the parties, the damage on competition in the beer market in Mauritius through the exit of Stag Beverages Limited will to a large extent be curtailed.

It must be noted that Phoenix Beverages Ltd has taken advantage of the leniency programme offered by the CCM and benefitted from significant reductions in fines.

“This is the first cartel investigation in which a financial penalty has been imposed. It is worth noting that the financial penalty is a reduced amount, because one of the parties took the benefit of the provisions regarding leniency,” Kiran Meetarbhan outlined.

According to her, leniency is internationally recognised as the best means of cartel detection and prosecution.

It works in favour of both the enterprises concerned and the Competition Agency, as the former receives either a total immunity from fine or a reduced fine, whilst the Competition Agency is able to conduct its cartel investigation in a shorter span of time without incurring heavy costs.

Finally, she stated that this case will also send the right signal to any enterprise in Mauritius, that the Competition Commission fully intends to use the full force of the law, with due respect to the rights of parties, in terms of natural justice and fairness.

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