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Heineken, Danone in beer probe
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January 28, 2000: 10:42 a.m. ET
EU regulators suspect cartel, raid offices of main brewers in France
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LONDON (CNNfn) - European Commission officials have begun a probe of French food company Danone and Dutch brewer Heineken, citing suspicions they ran a price-fixing cartel in France's beer market, a EU spokesman said Friday.
Michael Tscherny said officials searched the offices of Danone's Kronenbourg brewing unit in Strasbourg, France and the Paris offices of Danone [PSE:PBN] and Heineken Tuesday and Wednesday in the early stages of the EU's investigation. If a cartel is found to exist, the EU has the power to levy fines of as much as 10 percent of any accused company's annual revenue, he said.
"We suspect a cartel," said Tscherny, emphasizing that the EU has not brought any formal charges. Combined, the two companies account for as much as 80 percent of the French beer market, he added.
"If they have a cozy relationship about prices ... or how not to compete unnecessarily with each other, you can imagine the impact on consumers," Tscherny said.
The investigation comes just months after the EU launched a similar investigation in Belgium into Danone's Maes brewing unit. Any fines by the EU would be the first of their kind in the beer industry, Tscherny said. Heineken spokesman Albert Holtzappel, who confirmed the probe, said his company has never been the subject of such an inquiry.
"The Director General of the European Union has held an inquiry in the office of Heineken in France," Holtzappel said. "Apparently, this inquiry was aimed at the competition rules at the European level."
"Heineken sticks to the laws wherever it operates in the world," including French laws and EU regulations, he added.
Danone, which Thursday reported a stronger-than-expected 14 percent jump in profit in its latest quarter, did not immediately return calls seeking comment Friday afternoon Paris-time.
Shares of Danone (PPBN), the maker of products such as Dannon yogurt, LU cookies and Lea & Perrins sauces, were little changed at 225.4 euros in Paris. In Amsterdam, Heineken shares fell 2.5 percent to 52.8 euros. 
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Danone
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