What do you see as the major driver for consolidation of theGROLSCH company in the...

What do you see as the major driver for consolidation of the GROLSCH company in the beer industry in 2007-2008?

Expert Solution

Grolsch Brewery known simply as Grolsch, is a Dutch brewery founded in 1615 by Willem Neerfeldt in Groenlo. In 1895 the de Groen family bought the brewery. They had started their own brewery in Enschede the Netherlands in the early 19th century. It held a significant stake until November 2007. The main brewery is located today in Enschede. It was awarded the Koninklijk (Royal) title in 1995. The Grolsch brand became a part of the SABMiller group in March 2008.

Price fixing conviction:-

On 18 April 2007, The European commission imposed fines on Heineken International of €219.3m, Grolsch of €31.65m and Bavaria of €22.85m for operating a price-fixing cartel in the Netherlands, totalling €273.7m. InBev, (formerly Interbrew), escaped without a penalty because it provided "decisive information" about the cartel which operated between 1996 and 1999 with others in the EU market. The brewers controlled 95% of the Dutch market, with Heineken claiming a half and the three others 15% each.

Former EU Competition Commissioner Neelie Kroes was "very disappointed" that the collusion took place at the very highest (boardroom) level. She added, Heineken, Grolsch, Bavaria and InBev tried to cover their tracks by using code names and abbreviations for secret meetings to carve up the market for beer sold to supermarkets, hotels, restaurants and cafes. The price fixing extended to cheaper own-brand labels and rebates for bars. This led to change in ownership in Grolsch.

Change of ownership:-

On 19 November 2007 the board of Royal Grolsch NV accepted a €816 million offer for the company by SABMiller. The takeover was completed with the delisting of Grolsch's shares on 20 March 2008.

ekkarill92 answered 2 years ago

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