Everything is rigged. That’s what we have found out over the last two years. Stock markets, forex, interest rates, the price of gold, oil, aluminum…. After battling that rigged world all day, you finally get home or rest your elbows on the bar of a watering hole, and all you want is chill out, go back to basics, and take that first big gulp of your favorite beer. It would heal the wounds of the day, and you’d feel good, knowing that it’s the one thing left in this world – something so fundamental to life that it goes back thousands of years – that hasn’t been rigged against you yet.
Or so you’d think. Turns out, in Germany, where beer belongs to the basics of life itself, the price of beer has been rigged for years. This time the perpetrators weren’t Deutsche Bank and Goldman Sachs or any of the usual suspects, but beer brewers. Not your small craft brewers, but large brewers, including subsidiaries of the largest global brewing mega-outfits in the world.
On Wednesday, the German Federal Cartel Office announced that it had concluded its investigation and proceedings into beer price fixing and had imposed fines of €338 million ($466 million) on 11 brewers that account for over half of Germany’s €7 billion in beer sales. It also hit a regional brewers’ association and 14 individuals. It was a two-step procedure: 6 brewers, 7 individuals, and €231.1 million in fines today; and 5 brewers, 7 individuals, and €106.5 million in fines in January.
The investigation proved, according to Cartel Office President Andreas Mundt, that the companies had entered into price-fixing agreements via personal and telephone contacts. In 2006 and 2008, they agreed on price increases for keg beer of €5 to €7 per hectoliter (1 hectoliter = 26.4 gallons). In 2008, they also agreed to raise the price of bottled beer by €1 per case.
Germans are a cynical bunch, and these sorts of shenanigans surprise no one, but the fact that it made their sacrosanct beer more expensive just as their real wages were being cut, along with benefits and pensions for the lucky ones, and unemployment compensation and other social payments for the unlucky ones, that didn’t sit well.
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