The European Commission has fined brewers Heineken and Kronenbourg €2.5 million for reaching an "armistice" agreement to divide beer distribution networks in France.

The commission, the European Union's executive, said France's two main brewery groups had agreed in 1996 to stop acquiring distributors outside an agreed list, calling a ceasefire in an "acquisition war" that was costly for both firms.

Heineken and Kronenbourg also agreed to balance the total volumes of beer they distributed, as well as the volumes of each other's beer brands that they delivered, the commission said.

The commission has fined Dutch brewer Heineken €1 million.

Groupe Danone and Brasseries Kronenbourg received a €1.5 million fine. The Kronenbourg brand has since been bought from Danone by Britain's biggest brewer, Scottish & Newcastle.

The commission said the agreement, code-named "armistice", was never implemented and it took this into account when assessing the fines.

The commission quoted an internal note from the chief executive of Heineken in 1996, who wrote: "Yesterday we have reached agreement with Danone to put an end to the stupid and costly acquisition war."

Heineken said in a statement that it was studying the ruling to decide if it would make an appeal, but that the size of the fine indicated the alleged infringement was only "incidental" in nature.

A Danone spokesman declined to comment but noted the commission had said the alleged plan was never put into action.