CA asked to reverse ruling in 'bottle-snatching' case

MANILA, Philippines - The Court of Appeals (CA) was asked yesterday to reconsider its decision clearing San Miguel Corp. (SMC) in a damage suit in connection with the alleged hoarding of empty beer bottlers and plastic crates of another local beer maker, Asia Brewery Inc. (ABI).

In a 62-page motion for reconsideration, ABI lawyer Eduardo Ceniza asked the CA to reverse itself and instead uphold a 2008 ruling of the Marikina regional trial court finding SMC guilty of unfair trade practices and awarding ABI more than P130 million in damages.

ABI argued that the CA “erred when it relied on the so-called ‘swapping agreement’ to justify San Miguel’s illegal trade practices consisting of the intentional withdrawal and hoarding of a huge number of Asia Brewery’s beer bottles and cases to disrupt the latter’s production and distribution system and gain unfair advantage over its sole competitor in the Philippine beer market.”

The CA earlier granted a petition of SMC questioning the ruling of Judge Alice Gutierrez of Marikina RTC’s Branch 263.

The appellate court’s 11th Division upheld SMC’s defense that the ABI beer products seized by the court sheriff from its plants and warehouses were leftovers when ABI unilaterally terminated the swapping agreement and refused to take back its bottles and shells.

The CA also ruled that SMC’s top management was not aware of the alleged illegal activities of its salesmen in the field. It also found ABI liable for P116 million in damages for what it said were unfounded allegations that damaged SMC’s reputation.

ABI, however, assailed the CA decision as contrary to evidence.

In a verbal swapping agreement between ABI and SMC in 1990, both firms agreed to recover empty bottles of ABI’s Beer na Beer and SMC’s Pale Pilsen that were mistakenly retrieved by both parties in the normal course of trade. The swapping agreement was in effect only in 1990, 1991 and part of 1992.

ABI says it terminated the swapping agreement because the unusually large volume of bottles that SMC was tendering to ABI ostensibly under the swapping agreement indicated that SMC was deliberately retrieving ABI bottles and shells from dealers and retailers to withdraw them from the normal cycle and course of trade.

ABI said it went to court after aerial surveillance of SMC’s plants and warehouses in Metro Manila and San Fernando, Pampanga confirmed that SMC was hoarding and hiding a huge volume of ABI beer bottles and plastic crates. A raid of SMC’s three warehouses in 1997 yielded over 1.6 million bottles of ABI’s Beer na Beer, Carslberg, Manila Beer, Colt 45, Lone Star and Budweiser in various sizes, some of which were still unopened.

Also found inside SMC’s warehouses were over 130,000 plastic crates that ABI said could not have been part of a swapping agreement, which that only involves bottles. The court sheriff also found red ABI shells that were painted green and marked with the SMC logo to make them look like SMC shells.