Montreal, May 5, 2003 – In reaction to the decision by the Competition Bureau to discontinue its inquiry into alleged anti-competitive practices by the Labatt and Molson breweries, the executive of the Association des microbrasseries du Québec expressed dismay.
According to the Association, the decision as well as the decision backgrounder published by the Competition Bureau (see attached) clearly shows that the microbreweries’ allegations are founded and that the practices of the large breweries have negative impacts on competition. Despite this fact and the analysis of various documents relating to conditions in this very specific market, the federal Bureau acknowledges that the practices indeed exist but that they do not constitute a violation of the law.
In fact, while confirming that Molson and Labatt are in a dominant position, the Competition Bureau acknowledged the existence of the practices alleged by the microbreweries to the effect that Molson and Labatt had concluded agreements with licensed establishments that include :
clauses requiring establishments to sell certain brands at the same price as their competitors (price parity between certain brands)
As for the decision’s reference to fighting brands or predatory pricing, the complainants never complained about this issue as minimum pricing established by provincial legislation precludes such practices.
Regarding anti-competitive practices by Molson and Labatt, the Bureau recognizes that they are indeed taking place.
But experts retained by the Bureau conducted an analysis that does not support the argument that competition was substantially reduced or harmed during the period in question.
As a result, the Bureau discontinued its inquiry and concluded that the evidence does not support making an application to the Competition Tribunal.
According to André Dion, President of the Association des microbrasseurs du Québec, “such a decision forces us to think that the only economic demonstration that would be convincing would be quite simply if our businesses being forced to close or go bankrupt. What’s more, we never had an opportunity to meet these so-called experts or question their analyses. We are in a better position than anyone to prove that we were subjected to prejudice on an economic level.”
Supporting his argument, a survey conducted by Léger marketing in March 2003 of consumer attitudes and appreciation of Quebec microbrewery beers showed that the two biggest obstacles to buying microbrewery beers were: difficulty finding cold microbrewery beer (43%) and microbrewery beers being out of stock (40%).
Since the complaint was filed in August 2000, these exclusivity contracts condemned by the Bureau have become widespread common practice.
According to the Association, because the Competition Bureau acknowledges that certain practices are anti-competitive, it should have allowed the Competition Tribunal to judge the impact of the practices that are used not only in the Quebec beer market but throughout the food industry. It is indeed a very dark day, not only for Quebec microbreweries but also for all small producers in the food industry in Canada.
Quebec microbreweries want consumers to have adequate access to their products and ask nothing more than to have the opportunity to do business in an competitive and healthy environment where their access to points of sale will not be systematically blocked by any particular party.
In this context, Quebec’s small brewers will continue their fight to preserve their slim access to the market, which is shrinking with every day that passes, and will continue to denounce these practices to beer lovers.
“It is not because we are small that we should have not right to live!” said Laura Urtnowski, President of the Brasseurs du Nord and Association Vice-President.
In conclusion, the Association wants to reiterate that its members represent about 5% of the beer market in Quebec. Over the past few year, the excellent quality of Quebec microbrewery products merited more than 30 international awards for quality. Quebec regional brewers make substantial contributions to Quebec brewing know-how and generate more than 680 jobs.
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Source: Pierre Desjardins
Pyramide Public Relations
Tel.: (514) 845-2257
Cell.: (514) 594-6554
Information: André Dion, President, Unibroue; President, AMBQ
Tel: (450) 658-7658
Laura Urtnowski, President, Brasseurs du Nord; Vice-President, AMBQ
Tel.: (450) 979-8400
