Menu

Regulation on the enforcement of Antimonopoly Law

  1.    Aim and purpose of the Regulation

1.1 The aim of the present Regulation is to control compliance with the requirements of the antimonopoly legislation of the Republic of Azerbaijan in "Carlsberg Azerbaijan" (hereinafter "the Company"), as well as to establish the procedure for the cooperation of the Company's divisions in case of audits held in the Company by the supervisory authorities

1.2 The present Regulation establishes:

1.2.1 the principles of cooperation of the Company's divisions to ensure compliance with the antimonopoly legislation of the Republic of Azerbaijan in the Company;

1.2.2 the order of interaction of the Company's division during the inspection in the Company on compliance with the antimonopoly legislation of the Republic of Azerbaijan;

1.2.3 the distribution of the competence of the Company's officials to comply with the principles and rules approved in the present Regulation.

 2.    Scope of use

 The requirements of the present Regulation apply to all Company's divisions and all employees of the Company.

3.    Regulatory framework

 The following regulatory acts are used in the present Regulation:

 - Law of the Republic of Azerbaijan dated on 04.03.1990 No. 526 "On antimonopoly activities";

- Law of the Republic of Azerbaijan dated on 02.06.1995 No. 1049 "On unfair competition"

 4.    Terms, abbreviations and symbols

The following basic concepts and abbreviations are used in the present Regulation:

Competition is the rivalry of economic units, when the autonomous actions of each of them exclude or limit the possibility of unilaterally effecting the general conditions of circulation of commodities in the relevant commodity market;

Discriminatory conditions are conditions of access to the commodity market, conditions of production, exchange, consumption, acquisition, sale, other transfer of goods, when the economic unit or several economic units are placed in an unequal position compared to other economic unit;

Unfair competition is any action of economic units (groups of entities) which is intended to gain advantage in the business activities, is contrary to the legislation of the Republic of Azerbaijan, customs of business turnover, requirements of integrity, rationality and fairness, and have caused or may cause losses to other economic units, competitors, or have caused or may cause harm to their business reputation;

Monopolistic activity is abuse by an economic unit, a group of entities of its dominant position, agreements or concerted actions prohibited by antimonopoly legislation, as well as other actions (inactivity), recognized under the Law on Monopolistic Activity;

Coordination of economic activity is coordination of activities of economic units by a third party not belonging to the same group of entities with any such economic unit and which does not carry out activities in the commodity market where the coordination of activities of economic units is performed. It is not the coordination of economic activities carried out within the "vertical" agreements;

Signs of restrictive competition are the reduction in the number of economic units not belonging to the same group of entities in the commodity market, growth or decline in the price of the goods not related to the corresponding changes in other general conditions of the circulation of commodities in the commodity market, the refusal of the economic units not belonging to one group of entities to act on their own in the commodity market, the determination of the general conditions for the circulation of commodity in the commodity market by the agreement between economic units or according to the binding instructions of the other entity, or as a result of the coordination by economic units not belonging to one group of entities of their activities in the commodity market, other circumstances that make it possible for economic unit or several economic units to unilaterally influence the general conditions of the circulation of commodity in the commodity market. And the establishment by state authorities, local governments, organizations involved in the provision of state or municipal services, with the participation in the provision of such services, of requirements for commodities or economic units not provided for by the legislation of the Republic of Azerbaijan;

Agreement is an agreement in the written form, contained in a document or several documents, as well as an agreement in oral form;

"Vertical" agreement is an agreement between economic units, one of which purchases commodity and the other provides (sells) commodity. The agency contract is not a "vertical" agreement;

Manager for Legal Affairs ("MLA") is the position under command of the Vice President for Legal Affairs of the Carlsberg Group over the Eastern Europe region, which includes monitoring of compliance with the provisions of the competition law of the Republic of Azerbaijan in the Company.

Activity is any action (inaction) of the Company/unit/employee (s) that may have legal consequences for the Company, including but not limited to: conducting negotiations, any correspondence (by mail, e-mail, facsimile) on behalf of the Company with any third party, including all Company's counterparts, state, municipal authorities; conclusion, performance of the contracts of the Company, modification of the terms of contracts concluded, etc.

Antimonopoly authority is the State Service for Antimonopoly Policy and Consumer Rights Protection.

Distributor of the Company is the entity (legal entity or individual entrepreneur) with which the distribution contract is concluded, and which carries out the purchase of the products from the Company in accordance with the contract and the sale of the products to the third parties.

 5. The procedure of the notification of the antimonopoly authority about significant changes in the Company's sales policy

 5.1 The following changes in the Company's sales policy are significant:

5.1.1 Modification of the financial terms of the distribution contract (granting or withholding of a delay in the payment of the delivered products; requirements on the fulfilment by the distributor of its obligations (bank guarantee, mortgage, security, etc.))

5.1.2 Modification of the Company's sales scheme:

- one-time change, reduction in the composition of the Company's distributors;

- transition to the sales of the Company's products entirely through entities belonging to the same group of entities as the Company;

- transition to the sales of the Company's products entirely direct to retail networks and points of sales.

  • Modification by the Company of the terms of delivery of the products to the distributors.
  • Modification by the Company of the terms of dealing with the returnable package.
  • One-time increase or decrease in the price of products by the Company

5.2 In the event that the sales department of the Company intends to make a significant change in the sales policy, this department undertakes to notify the Manager for Legal Affairs in the written form about the essence of the planned changes not later than 3 (three) months before the planned moment of introducing the corresponding change.

5.3 The Manager for Legal Affairs shall, within 10 (ten) days since the receipt of the notification, provide a written opinion on the possibility or impossibility of implementing the significant changes in the sales policy proposed by the sales department.

5.4 The Manager for Legal Affairs shall, within 10 (ten) days since the issuance of the opinion on the possibility of implementing the changes, notify the antimonopoly authority of the significant changes in the company's sales policy.

5.5 If a request for additional information and/or documents is received from the antimonopoly authority, the manager for legal affairs coordinates the collection of such information. Whereby the Sales Department is responsible for providing relevant information and/or documents.

5.6 The Finance Department is responsible for providing the Antimonopoly authority with quarterly reports in the form provided by the Antimonopoly Committee. The reporting shall be provided in the form established by legislation of the Republic of Azerbaijan not later than 25th day of the reporting month. The Finance Department is also responsible for the correctness of the information provided to the Antimonopoly Committee. The present document is to be agreed with the head of the controlling department, the Finance Director and signed by the chief accountant and director general of "Carlsberg Azerbaijan" LLC, as well as initialled by the Manager for Legal Affairs of the "Carlsberg Azerbaijan" LLC.

 

6. Activities prohibited by antimonopoly legislation in the Republic of Azerbaijan

6.1 All divisions of the Company are prohibited from performing activities on behalf of the Company that result or may result in the exclusion, restriction, elimination of competition and (or) infringement of the interests of other persons, including the following actions:

 6.1.1 establishing, maintaining the monopolistically high or monopolistically low price for the commodity;

6.1.2.   withdrawal of the commodity from circulation if the result of the exemption was an increase in the price of the commodity;

6.1.3.   imposing on the counterparty the terms of the contract that are not advantageous for counterparty or are not relevant to the subject matter of the contract;

6.1.4.   economically or technologically unreasonable reduction or discontinuation of the production of the commodity if there is a demand for the product or orders for its supply if it is possible to produce it cost-effectively;

6.1.5.   economically or technologically unreasonable refusal or reluctance to enter into contract with individual buyers (customers) in the event of the possibility of producing or supplying the commodity concerned;

6.1.6.   economically, technologically and otherwise unreasonable establishment of different prices (tariffs) for the same commodity;

6.1.7.   creating discriminatory conditions;

6.1.8.   impeding access to the commodity market or exit from the commodity market to other economic units.

In particular, the discounts for permanent distributors, as well as the cumulative discounts offered by the dominant company, may be recognized as having an "inhibiting effect" when the company is dominant and has a large share of the market, thus, reaffirms the market by weakening the future position of its competitors through actions that predetermine the future choice of distributors by preventing competitors from entering new markets. 

6.2.  All divisions of the Company are prohibited from concluding, on behalf of the Company, any agreements with the Company's counterparties or taking concerted action with them in the commodity market, if such agreements or agreed actions lead or may result in:

 6.2.1 establishment or maintenance of prices (tariffs), discounts, allowances (surcharges), costs;

The most serious violations are any agreements or coordination of the activities of the Company's distributors (from oral advice, letters, orders, regulations to signing agreements, protocols, etc.) aimed at establishing, maintaining, equalizing or coordinating the distribution prices of distributors (maximum or minimum), range of prices or discounts, or other actions aimed at coordinating the prices of the market (other than actions aimed at establishing for the buyer of the maximum price for the resale of products).

Even recommendations and payment of bonuses in case of compliance with the recommendations are prohibited.

Similarly, conspiracies with competitors (producers of similar products) to establish, maintain, equalize or coordinate the retail or purchase prices (maximum or minimum), price range or discounts are prohibited. The exchange of information on unrealized pricing or coordination intentions may also be illegal (so-called "price signaling").

The "cartel-type" agreement on pricing almost always entails fines, including very large ones.

Discussion of any information on the price strategy with competitors is unacceptable.

6.2.2. increase, reduction or maintenance of the tender prices;

Agreements with competitors, as a result of which producers agree among themselves on the prices to be paid to suppliers, are prohibited. Or an agreement on non-purchase of the products from a specific supplier.

6.2.3. division of the commodity market on the territorial principle, the volume of sale or purchase of commodities, the range of goods sold, or the composition of sellers or buyers (customers);

It is prohibited to influence in any way the sales territory of the Company's products purchased by the distributors.

Even recommendations and compensation bonuses in case of compliance with the recommendations are prohibited.

Agreements with competitors on the division of territories (refusal to supply each other's regions) are prohibited.

6.2.4. economically or technologically unreasonable refusal to enter into contracts with certain sellers or buyers (customers);

Collusion with competitors about any action for the refusal to enter into contracts with a particular customer (distributor) or customer category is illegal.

It is also unacceptable to agree with the competitor/competitors to divide certain customers into groups, each of which, one of the parties to the conspiracy intends to deal with without "intrusion" into each other's sphere.

6.2.5. imposing on the counterparty of the terms of the contract that are not advantageous to counterparty or are not related to the subject matter of the contract (unreasonable demands for the transfer of funds, other property, including property rights, as well as agreement to conclude a contract provided the introduction of provisions for the commodity not interesting for counterparty and other requirements);

It is prohibited to impose obligations on the distributors of the Company not to sell Competitors' products; purchase all or most of the procured products (beer, low-alcohol beverages, and soft drinks) from the Company.

6.2.6.economically, technologically and otherwise unreasonable establishment of different prices (tariffs) for the same commodity;

6.2.7. reduction or cessation of the production of commodities for which there is a demand, or where orders are available, with the possibility of their profitable production;

6.2.8. impeding access to the commodity market or exit from the commodity market to other economic units;

6.2.9. establishing conditions for membership (participation) in professional and other associations, if such conditions result or may lead to the avoidance, limitation or elimination of competition.

6.3. Other agreements between the Company and third parties or other concerted actions are prohibited if such agreements or concerted actions lead or may result in the restriction of competition.

6.4. It is prohibited to coordinate the economic activities of the counterparties if such coordination results in or may result in the consequences referred to above in this paragraph.

6.5. All parts of the Company are prohibited to engage in unfair competition, including:

6.5.1. dissemination of false, inaccurate or distorted information that may cause losses to the economic unit or impair its business reputation;

6.5.2. misleading with regard to the nature, mode and place of production, the consumer properties, the quality and quantity of the commodity or its producers;

6.5.3. incorrect comparison of the commodities produced or sold by the economic unit with the commodities produced or sold by other economic units;

6.5.4. sale, exchange or other entry into circulation of the commodity if the results of the intellectual activity and the related means of individualization of the legal entity, the means of customization of the goods, the works and the services are used unlawfully;

6.5.5. Illegal acquisition, use, disclosure of information that is a commercial, official or other secret protected by law.

6.6.  Any action shall be considered with respect to not violating the prohibitions set forth in section 6 of the present Regulation.

6.7. In the event that an employee/division of the Company, in the performance of his/her/its functions, is unable to assess unequivocally his/her/its planned actions for compliance with the requirements of the present Regulation, prior agreement must be obtained with the MLA. 

7. Training of the Company employees

Company employees the list of which is defined additionally (mandatory - directors of sales, operations, marketing departments) are required to undergo within the time limits set a recurrent training course conducted by the MLA on compliance with antimonopoly legislation.

8. Powers of Antimonopoly authorities during inspections

 8.1. The Antimonopoly authority has the right to verify the enforcement of antimonopoly legislation by commercial organizations, to receive from them the necessary documents, information, and explanations in writing or orally.

8.2. Employees of the Antimonopoly authority, in accordance with the powers entrusted on them, presenting their official identification cards and the decision of the head (his/her deputy) of the Antimonopoly authority to conduct an inspection on the enforcement of the Antimonopoly Legislation has the right of unhindered access to commercial organizations to obtain documents and information required by the Antimonopoly authority.

8.3. Commercial organizations (their officials) are obliged to submit to the Antimonopoly authority, on the grounds of their reasoned request, documents, explanations in writing or orally, information (including information that comprises commercial, service, other legally protected secret) required by the Antimonopoly authority.

8.4. The Antimonopoly authority has the right to inspect the premises, territories, objects and documents that belong to the legal entity and used to perform business activities.

The inspection shall be carried out in the presence of a representative of a legal person or its representative and two witnesses.

If necessary, photography and filming, video recording, and other methods of fixing material evidences are used.

A report shall be prepared on the inspection, indicating the date and place of its preparation, the position, the name and initials of the person completing the report, the information on the legal entity concerned, as well as its legal representative or other representative, of the territories and premises visited, the type, quantity, other identification characteristics, the type and the details of the documents.

The record shall be made in the inspection report on the use of photography and filming, video recording and other methods of fixing material evidence. The material obtained from the photography and filming, video recording and other prescribed methods of fixing material evidence shall be annexed to the relevant report.

The inspection report shall be signed by the official, who completed the report, the legal representative of the legal entity or, in cases of urgency, by another representative of the legal entity, as well as witnesses. In the event of the refusal of the legal representative of a legal person or other its representative to sign the report, it shall be recorded accordingly. A copy of the inspection report shall be given to the official representative of the legal entity or its another representative.

8.5 The Antimonopoly authority has the right to withdraw items that have been instruments of crime or administrative offences and documents of significance in a case of administrative violation and found at the place where the administrative violation was committed, or in the conduct of personal searches, the inspection of the items held by the physical person and the inspection of the vehicle.

The withdrawal is performed in the presence of two witnesses.

8.6. The Antimonopoly authority has the right to involve the internal affairs agencies to carry out the inspections.

To carry out its duties the police are entitled to perform operational investigations, inspect premises, vehicles, seize documents, etc.

9. Rules of actions of the Company's divisions in case of the inspection held by the Antimonopoly authority

9.1. Rules of actions during the inspection

9.1.1. Security officers meet the inspectors of Antimonopoly Authority when they enter the Company.

9.1.2. Security officers are required to notify:

- the Director General;

- The Manager for Legal Affairs;

- Security Manager

- The director of the Sales Department;

- The Director of Operational Activities;

- The Corporate Communications Manager.

These officials are required to designate by their written orders in advance one employee from their subordinate units as officer, responsible on the subject matter of this Regulation.

9.1.3. Security officers ask the inspectors to present documents confirming their credentials: Service certificates and Company inspection assignment.

These documents must be scanned and submitted to the Manager for Legal Affairs.

9.1.4. Security officers should request the inspectors to wait in the tasting hall (which has no documents, computer and office equipment) for arrival of the Manager for Legal Affairs and departmental officials.

9.1.5. The Manager for Legal Affairs checks the powers of the inspectors.

9.1.6. The Administrative Department organizes the provision of a free negotiating room where the Inspectors can work with the staff.

9.1.7. The Security Manager, in conjunction with the Manager for Legal Affairs, must monitor each inspector continuously.

9.1.8. The Security Manager, together with the Manager for Legal Affairs, conduct an accurate report of any conversations of the inspectors and notes of all documents, including electronic, reviewed by the inspectors during the inspection process, as well as copied and seized documents and other material evidence. The statements/questions of the Inspector, as well as all the responses provided by the staff members of "Carlsberg Azerbaijan", are also recorded.

9.1.9. If any of the employees of the Company should provide explanations, Manager for Legal Affairs must be present, if necessary, the employee must consult with the Manager for Legal Affairs about the legal issues for reply.

9.1.10. Documents provided to the inspectors on behalf of the Company in any of the units must be previously shown to the Manager for Legal Affairs.

9.1.11. All reports and other documents proposed by the inspectors to be signed on behalf of the Company should be first examined by the MLA.

9.1.12. After each day of the inspection, the Security Manager, together with the MLA, must make copies of the oral explanations given to the inspectors by the employees of the Company.

9.1.13. Upon completion of each day of inspection, each responsible person of the department must provide a written report to its head, the Director General, the Manager for Legal Affairs, on the status of the inspection in the unit with annex showing the list of persons questioned, issues, confiscated/copied documents.

10. Responsibility for the implementation of the Regulation

10.1. The Manager for Legal Affairs of the "Carlsberg Azerbaijan" LLC is responsible for monitoring the implementation of this Regulation.

10.2. All units and employees of the Company are responsible for the implementation of the established rules.