Brussels (Brussels Morning Newspaper) – Brasserie Nationale, Luxembourg’s largest brewery, lost its challenge to European Union antitrust scrutiny of its proposed purchase of wholesale drinks distributor Boissons Heintz on Wednesday. The General Court of the European Union ruled in favor of EU regulators, allowing the European Commission to proceed with its review of the deal.
This case highlights a growing trend among companies that are willing to challenge the EU review of deals that don’t meet the EU revenue threshold. This comes after U.S. gene sequencing company Illumina’s landmark court victory last year in its bid to acquire cancer diagnostic test maker Grail.
Why did the EU review a low-value merger?
Brasserie filed a grievance with the General Court after the European Commission instructed it to seek EU approval for the deal due to the significance of drinks imports in Luxembourg, despite the acquisition not meeting the revenue threshold that would require an EU review.
Europe’s competition authority ordered Brasserie to comply, at the request of Luxembourg’s antitrust agency. However, the brewer claims the Luxembourg request to the EU came too late.
What is Article 22, and how was it used?
The case highlights the European Commission’s use of Article 22 of EU merger rules, which allows it to review mergers that fall below normal thresholds if they could significantly affect competition, especially in sectors where imports are crucial, as is the case with alcoholic beverages in Luxembourg.
Why did the court side with EU regulators
The Luxembourg-based General Court approved the EU antitrust enforcer’s assessment of the deal.
“Since information limited to the mere existence of a concentration does not constitute ‘making known’ within the meaning of EU law, Brasserie Nationale and Munhowen have not shown that the request for referral had been submitted out of time,”
Judges stated.
Brasserie can appeal to the Court of Justice of the European Union, the highest court in Europe. Despite the ongoing lawsuit, Brasserie has since sought EU approval for the deal and has proposed remedies to address competition concerns. The EU will decide by July 17 whether to approve the deal.
