Closes investigation against Ringnes – commitments may give consumers a wider selection of beers

The Norwegian Competition Authority has concluded its investigation of Ringnes following commitments proposed by the company. Ringnes has agreed to amend its agreements with pubs and restaurants and thereby to make it easier for smaller breweries and suppliers to get access to the market. The commitments may lead to a wider selection of beers in pubs and restaurants.

The Competition Authority has investigated Ringnes since 2017. The Authority was concerned that Ringnes’ agreements had tied pubs and restaurants to Ringnes and forced these customers to buy beer exclusively from the company. Such agreements may hinder other breweries and suppliers access to the market, and amount to an infringement of the Competition Act’s prohibition against abuses of a dominant position.

Dominant companies have a special responsibility under the Competition Act not to impair competition. They may compete on the merits, but the conclusion of exclusivity agreements by dominant firms may foreclose smaller players from the market or reduce their possibilities to compete effectively. Weakened competition in a market may among other things, lead to less choice, reduced quality and higher prices to the detriment of consumers. This is the case regardless of the types of products or services involved.

– Under Section 11 of the Competition Act, firms with significant market power have a special responsibility to ensure that their conduct does not impair genuine undistorted competition in the market. Agreements between dominant companies and their customers that oblige the customers to buy all or most of their requirements from the dominant player, may restrict competition and is therefore a matter of concern for the Authority, says Director General Lars Sørgard.

Must open the market for competitors
Ringnes has committed not to conclude agreements that give the company exclusive rights to deliver beer to pubs and restaurants. Moreover, it must follow clearly from Ringnes’ agreements that the pubs and restaurants concerned are free to accept deliveries of beer from other breweries and suppliers.

The commitments make it possible for other breweries and suppliers to compete effectively with Ringnes on price, as Ringnes has undertaken not to grant discounts that tie pubs and restaurants to Ringnes, or to reward customers that source all their requirements from Ringnes.

Furthermore, Ringnes no longer has the possibility to limit other breweries or suppliers access to a pub or restaurant. Ringnes must from now on allow competitors to install their own equipment in pubs or restaurants, which are supplied by Ringnes, or allow competitors to use Ringnes’ own equipment if there is insufficient space for additional equipment.

– This decision ensures that pubs and restaurants that have agreements with Ringnes from now on freely can chose to buy beers from other suppliers. This increased choice will not only give consumers a wider selection of beers, but also encourage breweries and suppliers to develop and offer a larger selection of beers at lower prices in the future. In addition, the decision may ensure that the diversity of smaller breweries in Norway can be maintained, says lawyer and case manager Katrine Amdam.

The Authority invited customers and competitors to comment on the proposed commitments on 13 February 2020. The responses received by the Authority showed that other market players largely were positive to the proposed commitments. The final commitments were adjusted in light of the comments received during the consultation.

A trustee will ensure that Ringnes complies with the commitments. If Ringnes should not act in accordance with the submitted commitments, the Authority may reopen the investigation and could possibly impose a fine for non-compliance under the Competition Act.

It is the first time the Norwegian Competition Authority concludes an investigation by adopting a commitment decision, making commitments proposed by the company under investigation legally binding.