FDBusiness.com

Heineken/Punch Must Resolve Concerns Over Pub Merger

 Breaking News
  • Mergers & Acquisitions – Biggest Buyers and Sellers in 2019 Orkla, Pernod Ricard, Nestlé, Asahi, PepsiCo, Lactalis, Anheuser-Busch InBev, Azelis, Berlin Packaging, Kirin and Waterlogic were the most acquisitive companies of 2019, according to the bevblog.net food and drink transactions database,...
  • Tailored Insights For the Food Industry at Packaging Innovations 2020 Packaging Innovations 2020 will host curated content designed to tackle the biggest challenges faced by the food, drink, beauty, pharmaceutical and healthcare, e-commerce, and retail sectors, as part of the show’s...
  • Fazer Becomes Market Leader in Gluten-free Bakery Products Fazer Group is continuing to execute its growth strategy and invest in growing product categories by acquiring Vuohelan Herkku’s bakery and mill businesses. Vuohelan Herkku is one of the forerunners...
  • C&C Group Chief Retires C&C Group, the Irish and British drinks business, has announced that Stephen Glancey has stepped down as CEO and will leave the company at the end of February. Stephen Glancey...
  • KK Foods Plans £5.5 Million Expansion KK Fine Foods, a leading frozen food manufacturer based at Deeside in Wales, is set to expand and diversify with support from the Welsh Government, creating an additional 40 new...

Heineken/Punch Must Resolve Concerns Over Pub Merger

Heineken/Punch Must Resolve Concerns Over Pub Merger
June 14
11:30 2017

The CMA, the UK competition authority, has found that Heineken’s proposed purchase of part of the Punch Taverns estate could reduce competition in 33 local areas across Great Britain. Heineken must now offer proposals to address these concerns by 20 June or face an in-depth investigation into the merger. Punch is one of the UK’s largest leased pub companies, with a portfolio of more than 3,500 pubs nationwide. Heineken is planning to add Punch to its existing UK leased pub business – Star Pubs & Bars.

As part of an initial investigation, the Competition and Markets Authority (CMA) has looked in detail at areas where pubs operated by Heineken and Punch currently compete. It has identified 33 local areas where their pubs would not face sufficient competition after the merger, which could lead to price increases or a deterioration in the quality of the service on offer.

Concerns were also raised with the CMA that the merger would close off an important route to market for brewers that compete with Heineken. However, the CMA found that the pubs being acquired are only a very small part (4%) of the GB market and are therefore not a major route to market for brewers – which was backed by evidence from brewers showing that these Punch pubs typically account for only a small proportion of all of their sales to pubs.

The CMA also looked closely at whether the acquisition by Heineken could lead to a reduction in the choice of beer and cider on offer in the Punch pubs. The CMA found that any potential reduction would be limited, taking into account the drinks that Punch currently stocks and the range of drinks available in Heineken-owned pubs. It also found that Heineken would not have a strong incentive to reduce the range of beer and cider, in part because doing so would risk losing business in pubs where this is important to customers.

Andrea Coscelli, CMA Acting Chief Executive and decision maker in the case, says: “We have listened very carefully to a range of concerns about this merger. The companies will own less than 10% of all British pubs after any deal, but we are concerned about the loss of competition for pub goers in a number of local areas. Without sufficient competition from rivals, pubs in these areas might be able to raise prices or worsen the service they offer customers. Heineken will now have the chance to offer proposals to address these concerns – otherwise we will carry out an in-depth investigation.”

Heineken intends to offer acceptable undertakings and is confident that these will enable the transaction to be approved by the CMA without a Phase 2 referral.

David Forde, Managing Director for HEINEKEN UK, says: “We welcome this positive step towards completing our acquisition of Punch A. This decision by the CMA acknowledges that there are only a small number of local areas where competition may be diminished due to our acquisition of the pubs in Punch A. We are confident we can offer the CMA suitable undertakings to satisfy their concerns.”


Warning: count(): Parameter must be an array or an object that implements Countable in /home/fdbusiness/public_html/wp-content/themes/legatus-theme/includes/single/post-tags.php on line 5
Share

About Author

mike

mike

Related Articles

Food & Drink Business Conference & Exhibition 2016

Upcoming Events

[eventlist]

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber

Subscribe Here



Advertisements