Irish consumer watchdog is following Heineken's fake craft beer investigation

Vincent Wall gets the inside track on the company's unfolding craft controversy...

Heineken Ireland’s confirmation to Newstalk earlier this week that it had launched an investigation into how some of its branded beer products ended up being sold by some pubs and other outlets as local craft beers, has certainly got the industry talking.

It’s also got at least one of the agencies of the State sitting up and taking notice.

Earlier today the Competition and Consumer Protection Commission (CCPC) told Newstalk it was aware of both the issue and of the fact Heineken is seeking to address the matter by means of an external investigation.

"At this time, the CCPC does not have a formal investigation open, but will continue to monitor the issue," its statement added.

This monitoring brief might make it more difficult for Heineken Ireland to keep the results of its investigation, currently being conducted by Grant Thornton, under wraps.

Who sold what?

While the brewer was quick to apologise for any involvement it may have had in this practice – an unusual enough response from a large multinational organisation to an initial media query – it was also anxious to play down the extent of the problem and its possible motivation.

Sources close to Heineken Ireland suggested, that while the external investigation was still not completed, the company was pretty sure the mis-selling of its beers had taken place in fewer than one hundred of the 8,000 or so outlets it services around the country.

They were also confident, that to the extent any of its employees were aware of the practice, they were probably motivated more by trying to be helpful to clients who wanted a local craft brand in their portfolio, rather than any bumping up their sales figures or triggering of sales-driven bonus payments.

Perhaps so, but according to very credible industry sources, the issue has shaken Heineken Ireland to the core and its subsequent investigation has been both wide-ranging and comprehensive.

Munster beer trail...

It is understood to focus in particular on the stretch of territory from West Kerry back to the company’s brewing base in Cork City, but audits are being carried out on bars it services throughout the country.

It is also understood to focus not just on who was aware of this practice and why it was permitted to happen, but also on wider issues such as the use by publicans of mis-branded bar merchandise and mis-branded equipment such as draught beer dispensers.

While the revelation has prompted the usual slew of rumours and accusations that arise when any relatively dominant player in any industry sector is found with its trousers slightly down, credible sources suggest Heineken may not be the only brewer with questions to answer and that the mis-selling of beer products may be a more widespread industry practice than has emerged to date.

This practice is probably not illegal but it is, in this instance, reputationally highly damaging for a global organisation such as Heineken and more generally, it undermines consumer confidence in the growing Irish craft beer sector.

That is why Heineken Ireland should publish, as soon as possible, the findings of its investigation and should be pressurised to do so.

That is why the Competition and Consumer Protection Commission should certainly continue to monitor the issue.