Antitrust Advisory defended the interests of Denview, a leading alcohol producer
In July 2022, the FAS of Russia refused to initiate antitrust proceedings against Denview based on a complaint filed by Tamerlan (owner of the Russian retailers PokupAlko and Pokupochka). Denview is a global producer of strong liquor under the world-famous brands The Macallan and Highland Park, and the company is also successfully developing well-known brands in the standard and premium segments in Russia: Jim Beam, The Famous Grouse, Maker’s Mark, Sauza, Teacher’s and Bols.
Tamerlan contended that Denview had discriminated against it and impeded it from accessing the alcohol market by failing to enter into a direct supply agreement with it. Tamerlan also accused Denview of entering into an unlawful “vertical” agreement and of abusing its dominant position by unreasonably refusing to deal.
The FAS of Russia found that Denview’s actions did not constitute a violation of trade or antitrust law. Tamerlan disagreed with the FAS’s refusal to initiate antitrust proceedings and lodged an appeal in court. Denview was named in the case as a third party.
Three instances of the Russian courts found the FAS of Russia’s decision lawful, ruling that there was no evidence Denview had imposed different requirements on Tamerlan than those normally imposed on other retailers, and that therefore there was nothing discriminatory in Denview’s actions.
The courts also upheld the antimonopoly authority’s findings that Denview’s market share in the wholesale alcohol market was insufficient to qualify Denview’s actions as abuse of a dominant position and participation in an unlawful “vertical” agreement.
Denview’s business model of selling products to retailers through distributors and entering into direct supply agreements only in cases of high-volume purchases was found to be legitimate, due to the need to reduce logistics and supply administration costs. In addition, there was no indication that Denview had made any minimum retail price recommendations.
Tamerlan brought similar complaints against other producers of alcoholic beverages, specifically Beluga Market and Alvisa. In both cases, no evidence was found of any breach of trade law or antitrust law by the producers. It is noteworthy that in the Beluga Market case the courts held that recommendation of a certain price level was lawful if it was justified by the positioning of the goods on the market.