Is a cartel brewing or is brewing a cartel?
Dutch brewers including Heineken and Grolsch have been fined a total of nearly £185m between them for stifling competition and sharing price information with the intention of fixing prices. This cartel was discovered by EU investigators and the fine has been imposed by the EU competition commission.
Dutch brewers fined over cartel BBC News Online (18/4/07)
Beer makers fined in Dutch price probe Business Week (18/4/07)
EU fines Heineken for fixing beer prices Business Week (18/4/07)
Heineken and Grolsch fined for price-fixing Guardian (18/4/07)
Heineken fined 219m euro for fixing beer prices Times Online (18/4/07)
Questions
| 1. | Explain the conditions required for a cartel to develop. |
| 2. | Explain the methods used by the brewing firms to fix prices in the beer market. |
| 3. | Evaluate two policies that could be used by the EU competition commission to try to prevent cartels reemerging in the future in the brewing industry. |