Byers refers Interbrew's Bass deal but gives go-ahead on Whitbread
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Your support makes all the difference.The drive by Interbrew, the Belgian brewer, to become the industry's leading player in Britain received a setback yesterday when its £2.3bn purchase of Bass' beer division was referred to the Competition Commission.
The drive by Interbrew, the Belgian brewer, to become the industry's leading player in Britain received a setback yesterday when its £2.3bn purchase of Bass' beer division was referred to the Competition Commission.
If the UK authorities impose any conditions on the transaction - or block it entirely - it could prove costly for Interbrew, as the acquisition, which was completed last month, was not conditional on clearance by British regulators.
Stephen Byers, the Secretary of State for Trade and Industry, said the purchase of the maker of Carling, Tennent's and Caffrey's by the unlisted Belgian company raised concerns over concentration of both production and distribution.
"At the brewing level, the merger reduces the number of national brewers from four to three, creates a new market leader and significantly increases the level of concentration in the hands of the top two brewers," Mr Byers said.
A spokesman for Interbrew said the referral was not a surprise and the company was confident that it could address the authorities' concerns. "We have always anticipated this," the spokesman said. "We feel quite confident with it, we think that we have a strong case."
Analysts said that the Commission was likely to focus its enquiry on the distribution agreements that Interbrew has struck with Bass and Whitbread to secure access to their pub estates.
Mr Byers yesterday also cleared Interbrew's £400m acquisition of Whitbread's brewing division, which was announced in May. Both decisions were taken on the advice of the director-general of Fair Trading, John Bridgeman.
The purchase of the Bass assets gives Interbrew 32 per cent of the UK market, ahead of Scottish & Newcastle, with 28 per cent, and Carlsberg-Tetley with 13 per cent.
The Commission will report to Mr Byers by 6 December.
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