FDBusiness.com

Heineken/Punch Must Resolve Concerns Over Pub Merger

 Breaking News
  • Diageo Launches New Super-premium Gin Diageo is introducing a new super-premium Italian gin, Villa Ascenti. The launch comes at a time when the super-premium and ultra-premium gin categories are the fastest growing segment within gin in Europe. Villa Ascenti will initially be available in 14 European countries. A new €420,000 (£360,000) distillery has been built on the site of the brand [...]...
  • European Commission Proposes to Increase Price Transparency in the Food Chain Having banned unfair trading practices and improved producer co-operation, the European Commission has presented the third element to improve fairness in the food supply chain by introducing greater transparency in the way prices are reported throughout the chain. The European Commission has tabled a proposal that will make available crucial information on how prices are determined [...]...
  • Irish Distillers Launches ‘A Story of Irish Whiskey’ Podcast Series Irish Distillers, Ireland’s leading supplier of spirits and wines and producer of some of the world’s most well-known and successful Irish whiskeys, has launched its first podcast, ‘A Story of Irish Whiskey’. Produced by Last Cast Media, the five-part series is a story of coming together, sharing, conquering markets and how three families, competitors for [...]...
  • C&C Group Increases Revenue by 187.3% to over €1.5 Billion C&C Group, the UK and Ireland drinks production and distribution business, increased net revenue by 187.3% to €1.575 billion in 12 months ended 28 February 2019, reflecting the acquisition of Matthew Clark and Bibendum from the administrators of Conviviality Group in April 2018. Excluding Matthew Clark and Bibendum, and on a constant currency basis, net [...]...
  • 2 Sisters Accelerates Business Transformation 2 Sisters Food Group has announced a series of actions as part of its accelerating transformational strategy to turnaround the business. The company is making further investments in its UK Poultry and Fox’s Biscuits businesses, and is proposing to reduce the number of its UK Poultry sites in order to produce shorter, more efficient supply [...]...

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.”

About Author

mike

mike

Related Articles



Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • June 18, 2019Multimodal 2019
  • June 25, 2019BevExpo 2019
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber

Subscribe Here



Advertisements