Wednesday 05 October 2022

Cartels

Heineken was fined over €200m by the European Commission today for price fixing and market rigging together with two other Dutch and one Belgian breweries. Heineken is probably laughing all the way to the bank.


Why? Because the profits from market fixing apparently significantly outweigh the risks. Otherwise companies wouldn’t take the risk. And the investigative apparatus is slow and ineffective compared with the efficient cartel mechanisms that corporate sectors have developed. The fight is unfair: the corporate heavyweight versus the watchdog featherweight!
Heineken is being fined in April 2007 for dirty deeds committed in 1996-1999. European civil servants investigating the matter were apparently switched to other cases. Then there’s the legal wrangle over sanctions and that too can be extremely lengthy. No immediate need to fear the strong arm of the law, thus.
The heavy fines against the Dutch building sector not so long ago were deemed to be a powerful anti-corruption tool. Nevertheless, several construction firms have been found continuing their cartel practices.
What should be done? A European anti-cartel body with proper resources would be a start. Even bigger fines and sanctions against directors would also help. But the practice is so profitable and effective that the companies will have to be virtually knocked out before they desist from carving up markets with their competitors.

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