Three Dutch brewers have been fined €273.8 million by the EU for price fixing.

Heineken, Grolsch, and Bavaria, which produce three of the most popular Dutch beers, all face stiff penalties following an investigation by the European Commission.

A fourth Dutch company, InBev, was also found to have taken part in the cartel but will face no penalty because it provided key information to help the investigation.

In a decision published yesterday, the commission said the brewers held numerous official meetings, during which they co-ordinated prices and price increases of beer between 1996 and 1999. Price fixing took place in the off-licence sector and the on-trade segment of the market, which relates to beer sold in pubs, hotels and restaurants.

Competition commissioner Neelie Kroes said it was unacceptable that major beer firms had colluded to increase prices and carve up the market between themselves. "The highest management of these companies knew very well that their behaviour was illegal but they went ahead anyway and tried to cover their tracks," she added.

Heineken said it would appeal against its €219 million fine, calling it "excessive".

A Heineken spokeswoman also said that the investigation had nothing to do with the brewer's extensive Irish operations, which are based in Cork.

The commission also levied fines worth €31.7 million for Grolsch and €22.9 million for Bavaria, the lower fines reflecting the fact they sell less beer than Heineken.

The huge penalty imposed by the commission in the cartel case reflects its increasingly tough stance in antitrust cases. This year already it has fined companies more than €2 billion. This cash will go into the EU budget to help reduce member states' contributions to the running of the union.

The commission has also undertaken surprise inspections of brewers in several other EU states including France, Luxembourg, Italy and Belgium.