Czech Republic: Czech Plzensky Prazdroj can conclude contracts on minimum beer sale

The Czech brewery Plzensky Prazdroj can sign contracts with restaurant operators on a minimum annual beer sale, as anti-monopoly office UOHS chairman Martin Pecina allowed an exception for the fir, the Prague Monitor announced on March 21.

The Czech brewery pledged to lower the minimum annual beer delivery to restaurants in new contracts if they show interest. Within the latest appellate proceedings, Prazdroj created conditions that will help develop competition on the market, Pecina told CTK on March21.Some contracts on minimum beer purchases said that restaurant operators had to buy as much beer from Prazdroj as they sold. Prazdroj offered them in exchange, for example, promotion articles with its logo.

"The buyer will now be able to buy beer from rival producers without losing the advantages stemming from the contract signed with Plzensky Prazdroj," Pecina explained. Prazdroj asked for an exception after UOHS first-instance decision in 2003 when it was fined CZK 2.3 million for restricting competition.

Restaurant owners who had concluded contracts with Prazdroj on minimum deliveries do not have to buy now from Prazdroj the same amount of beer as in 2003-2005. The UOHS has lowered the amount to 70 percent.

"That will enable restaurant operators to buy a significant amount of beer from competitors," Pecina stated.

Restaurants can now also be sure that if beer consumption falls by 10 percent annually, Prazdroj will cut the agreed amount of the beer to be supplied. The UOHS has dealt with Prazdroj´s behaviour several times already. In 1998 it imposed a CZK 450,000 fine on the company for exclusive contracts with buyers. It also fined the breweries Krusovice and Radegast.

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