Beer cartels: First fine sought in Mauritius leniency matter

mauritius

madagascar

Precedential leniency case yields initial fine

The Competition Commission of Mauritius (“the Commission”) has recommended fines of approximately €487,000 and €158,000 be imposed on Phoenix Beverages Ltd (PLB) and Stag Beverages, respectively, for their involvement in a cartel.

This is the country’s first cartel investigation to be made public, and the first time a party has used its leniency programme.

Phoenix and Stag have been accused by the Commission of colluding to divide the Mauritian and Madagascan beer markets between the two manufactures. The alleged agreement between the parties involved Stag leaving the Mauritian market, allowing Phoenix to dominate the country’s beer market.

Phoenix applied for leniency prior to the 24 May 2014 deadline and consequently received reduced fine.  Both companies assisted the Commission with its investigation.

The Executive Director of the CCM, Mrs. Kiran Meetarbhan, said:

“Many jurisdictions have developed programs that offer leniency because of the many benefits that flow from having them. In line with international best practices, the CCM has not lagged behind in developing a leniency program that has been reinforced so as to grant full amnesty to the first reporting firm in addition to offering judicial security to informants.

This investigation triggered our first leniency application since the CCM’s inception. This is also the first cartel investigation which I have launched in my capacity as Executive Director for which I have recommended financial penalties in addition to other measures to address competition concerns.

I wish to commend the main parties’ approach in this investigation which has revealed a true spirit of cooperation.  Leniency programs create powerful incentives to enterprises to race to self-report at an early stage. Evidence can thus be obtained more quickly, and at a lower direct cost, compared to other methods of investigation, leading to prompt and efficient resolution of cases. This case provides a perfect example of the manner in which a leniency application coupled with the active cooperation of the main parties have led to the successful completion of the investigation within a remarkable three months’ timeline.

The fine[] recommended on Phoenix Beverages Ltd takes into account its leniency application, absent which, the fines would have been higher. Phoenix Beverages Ltd took advantage of the amnesty provisions, which lapsed on 24th May 2014. We cannot stress enough the importance of the leniency programme with regards to collusive agreements.

Several factors help to free an economy from the malicious effects of a collusive agreement including a strong political support towards fighting cartels and a resilient commitment to equip the competition agency with the appropriate legislative framework and adequate financial resources. The Government has signified its intention to further empower the Competition Commission in order to better fight cartels. This was announced by the Prime Minister in his address to the Nation this year.”

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