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Lawyers file case against the monopoly of Presidente beer

Lawyers Guido Gómez Mazara and José Luis Hernández Cedeño filed a petition before the National Commission for the Defense of Competition (Procompetencia) in which they request precautionary measures be taken against the Dominican National Brewery (Cervecería Nacional Dominicana-CND), the country’s largest brewery, for their unfair marketing practices for beer and rum. The lawyers argue that the CND is acting in violation of Article 50 of the Constitution that prohibits monopolies as well as articles 64 and 65 of the General Law for the Defense of Competition (Law 42-08).

The market share enjoyed by the CND is said to be 98% of the beer market that includes imports and this according to the case file facilitates price gouging.

The request by the lawyers is based on the results of a study carried out by Procompetencia after the merger of the Dominican National Brewery and the Brazilian firm Ambev. They say the company delves in “unfair practices” that suppresses the participation of other beer and rum importers or manufacturers in the Dominican market. Beginning back in December, the lawyers have been working with the Commission and requesting precautionary orders that would force the CND to cease and desist from unfair competitive practices.

The report by Procompetencia says: “Competitors (beer importers) have complained of the unfair marketing practices implemented by CND-Ambev. The requirements of an exclusive contract are commonly identified. It is evident that this is an abuse of the dominant market position held by CND-Ambev.”

The lawyers argue that the near control of the national beer market has allowed Presidente to unfairly increase their prices. The attorneys cited as an example the fact that in 2012 a bottle of Presidente before taxes cost RD$38.81, while in 2015 the same cost was RD$58.99, which represents a 52% increase. The jurists argued that even after adjustment for inflation, the pretax cost of that beer should have been RD $49.95 in September 2015.

The lawyers also note the struggle between CND-Ambev and United Brands that owns the Heineken brand, saying that the premium clients of Presidente are prohibited from exhibiting promotional material for Heineken or Coors under the threat of having free beer coolers removed from their premises. CND-Ambev employees who do not report clients who have refused to comply with the company’s point of purchase signage requirements, have been pressured and in some cases fired by the company.

Source: DR1, 7dias

Jan 27, 2017

Category: DR News |

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Last updated June 24, 2017 at 11:34 PM
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