Belgium: Belgian regulators to probe InBev brewing giant

InBev SA said it is "in line" with European laws setting out its market obligations in reaction to news it could face an antitrust investigation for abuse of dominant market position after recent price hikes, according to AFX News. "We know we are in line with European contract legislation. You have rights and obligations. We follow these obligations very strictly," said a spokeswoman for InBev's Belgian operations on April 19.

Belgian economy minister Marc Verwilghen has asked the national Competition Council to open an investigation into brewer InBev's recent price hikes, AFX news cited unsourced local press reports. Verwilghen accuses the brewer of abusing its dominant position after it announced a 3 pct price hike on beer just seven months after the last price hike.

Belgian competition regulators are to launch a probe of Belgian-Brazilian brewing giant InBev to determine if the company has abused its large share of the market, AFP posted on April 19.

Earlier Belgian news agency Belga reported that Economy Minister Marc Verwilghen had told members of parliament that he had asked the Competition Council to launch an inquiry into possible abuse of a dominant market position.

Asked by AFP, the council said that it had not yet received notification. However, a source close to the matter said that the launch of an inquiry was "imminent".

The National Federation of Beer and Drinking Water Dealers recently criticized plans InBev announced in early April to hike the domestic price of beer by three percent, only seven months after the last increase.

The professional association claims that the move has resulted in a drop in beer consumption at hotels, cafes and restaurants.

Analysts were unconcerned by the prospect of a probe and InBev shares gained 0.21 euros or 0.54 percent in early trading to 38.84 euros, while the Bel 20 of leading Belgian shares rose 27.65 points or 0.72 percent to 3,862.90 points.

KBC Securities analyst Wim Hoste said: "Given the limited part of Belgium in total volumes and our impression that the whole issue is a bit politically driven, we are not overly concerned by this news."

Degroof analyst Marc Leemans said: "We would not overestimate the impact. InBev's market share has been over 50 percent for years."

The group -- with a 57.2 percent market share in Belgium -- has defended its decision to raise domestic prices, citing increased energy costs and inflation.

The result of the 2004 merger between brewer InterBrew of Belgium and AmBev of Brazil, the group is the biggest beer group in terms of volume but trails second behind US brewing giant Anheuser-Busch in financial terms.

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