Pub owners, retailers, brewers, unions and politicians in Britain were divided in their reactions to the bar put by the Department of Trade and Industry on the acquisition of Bass by Interbrew.
The Association of Licensed Multiple Retailers, which represents many of the big pub-owning groups in the UK, said: "The Secretary of State's decision is not only brave but a vindication of our defence of choice for multiple operators and for the whole of licensed retail.
"We have always resisted the concentration of supply, believing that it has proceeded too far from the situation that applied at the time of the Beer Orders when there were six major brewers." If the merger had been allowed to go thrpough, the ALMR said, "Ultimately, the consumer would have been faced with less choice and higher prices and the industry as a whole would have been poorer."
Many individual pub managers were cheering Stephen Byers' decision as secretary of state for trade and industry to force Interbrew to divest itself of Bass. They said that with the Belgian giant already owning Whitbread, it controlled nearly 80 beer brands in Britain, and no pub would have been able to refuse to stock Interbrtew brands. One manager in Newcastle said: "They'd have been able to charge what they like. We'd have had no choice." He also refused to believe Interbrew's stated commitment to local brews, saying: "It would have diluted the English pub concept, whereby you can go into 10 pubs and get 10 different beers. They'd have standardised everything."
Unfortunately the cliam is undermined by the situation in Belgium, where you can go into one bar and get a hundred different beers.
In Burton upon Trent, where Bass employs 1,600 out of a population of 65,000, local politicians, businesspeople and unions had lobbied the secretary of state for trade and industry, Stephen Byers, to try to get him to approve the deal. The president of Burton's chamber of commerce, Mike Swallow, said the decision was "a body blow which could destabilise the town for decades." The local Labour MP, Janet Dean, who took the seat from the Tories in 1997 after 45 years of Burton electing Conservative MPs, said she was "bitterly disappointed".
Unions in the brewing industry, who had backed the Interbrew takeover, were stunned by the announcement that the deal was to be blocked. The GMB said: "We are concerned that the future of thousands of jobs has again been thrown up into the air. We understand the government has a res[ponsibility to consumers, but there are also implications for the workforce that must be taken into consideration." The TGWU said its member s now had to face "a long period mof uncertainty", with only a few likely purchasers of Bass.
Among individial pub cpompanies, Tony Hill, chief executive of SFI, saying that the DTI's decision was "draconian and ineffective û it won't make an iota of difference to most of the 58,000 pubs in the UK."
However, Hugh Osmond, chairman of Punch, which had told the Competition Commission that a merger between Bass and Interbrew would create "an unacceptable level of concentration at both the production and distribution level which would à inevitably lead to less choice and higher prices in retail outlets", said after Byers's decision: "This is an absolute disaster for Interbrew. I don't want to gloat too much, but it is very amusing."
The Society of Independent Brewers, which represents Britain's micro-brewers, said that "by and large" the independent brewery sector welcomed Interbrew as "the best firm to come into the UK market at this level. But after the DTI's rejection of the Bass /Interbrew deal, Siba's reaction was one "puzzled incredulity", according to the organisation's general secretary, Peter Haydon.
Haydon said: "We do not believe that the Interbrew/Bass deal would foreclose the market for the simple reason that the market is foreclosed already.
"We do not believe that any potential purchaser will be as sympathetic to the traditional nature of the UK market as Interbrew showed signs of being. We cannot imagine, for example, any other potential buyers promising to put the kind of advertising support behind Draught Bass that Interbrew were intending, and which would have had a beneficial effect upon the whole cask ale sector."
The Campaign for Real Ale said that as a consumer group it "welcomed the fact that the government has put the consumer first. But if the business is sold to another international group, what is the point of blocking the deal?"
Commentators agreed that Interbrew had completely missed the line the DTI would take. The head of European competition and regulation at the law firm Clifford Chance, Chris Bright, said: "I suspect they may have been wrongfooted in feeling that if it all went wrong, they could always get rid of Whitbread" û a move rejected by the Competition Commission. Another lawyer said: "You can't say, 'there are duopolies everywhere else, why not have one here as well?' Regulators don't like that sort of analysis.
However, everybody agreed that Bass had played its hand perfectly in making the sale of its breweries to Interbrew unconditional on approval by the British competition authorities, and getting a premium price around 50% higher than Interbrew is likely to receive if and when it sells on.
The Association of Licensed Multiple Retailers, which represents many of the big pub-owning groups in the UK, said: "The Secretary of State's decision is not only brave but a vindication of our defence of choice for multiple operators and for the whole of licensed retail.
"We have always resisted the concentration of supply, believing that it has proceeded too far from the situation that applied at the time of the Beer Orders when there were six major brewers." If the merger had been allowed to go thrpough, the ALMR said, "Ultimately, the consumer would have been faced with less choice and higher prices and the industry as a whole would have been poorer."
Many individual pub managers were cheering Stephen Byers' decision as secretary of state for trade and industry to force Interbrew to divest itself of Bass. They said that with the Belgian giant already owning Whitbread, it controlled nearly 80 beer brands in Britain, and no pub would have been able to refuse to stock Interbrtew brands. One manager in Newcastle said: "They'd have been able to charge what they like. We'd have had no choice." He also refused to believe Interbrew's stated commitment to local brews, saying: "It would have diluted the English pub concept, whereby you can go into 10 pubs and get 10 different beers. They'd have standardised everything."
Unfortunately the cliam is undermined by the situation in Belgium, where you can go into one bar and get a hundred different beers.
In Burton upon Trent, where Bass employs 1,600 out of a population of 65,000, local politicians, businesspeople and unions had lobbied the secretary of state for trade and industry, Stephen Byers, to try to get him to approve the deal. The president of Burton's chamber of commerce, Mike Swallow, said the decision was "a body blow which could destabilise the town for decades." The local Labour MP, Janet Dean, who took the seat from the Tories in 1997 after 45 years of Burton electing Conservative MPs, said she was "bitterly disappointed".
Unions in the brewing industry, who had backed the Interbrew takeover, were stunned by the announcement that the deal was to be blocked. The GMB said: "We are concerned that the future of thousands of jobs has again been thrown up into the air. We understand the government has a res[ponsibility to consumers, but there are also implications for the workforce that must be taken into consideration." The TGWU said its member s now had to face "a long period mof uncertainty", with only a few likely purchasers of Bass.
Among individial pub cpompanies, Tony Hill, chief executive of SFI, saying that the DTI's decision was "draconian and ineffective û it won't make an iota of difference to most of the 58,000 pubs in the UK."
However, Hugh Osmond, chairman of Punch, which had told the Competition Commission that a merger between Bass and Interbrew would create "an unacceptable level of concentration at both the production and distribution level which would à inevitably lead to less choice and higher prices in retail outlets", said after Byers's decision: "This is an absolute disaster for Interbrew. I don't want to gloat too much, but it is very amusing."
The Society of Independent Brewers, which represents Britain's micro-brewers, said that "by and large" the independent brewery sector welcomed Interbrew as "the best firm to come into the UK market at this level. But after the DTI's rejection of the Bass /Interbrew deal, Siba's reaction was one "puzzled incredulity", according to the organisation's general secretary, Peter Haydon.
Haydon said: "We do not believe that the Interbrew/Bass deal would foreclose the market for the simple reason that the market is foreclosed already.
"We do not believe that any potential purchaser will be as sympathetic to the traditional nature of the UK market as Interbrew showed signs of being. We cannot imagine, for example, any other potential buyers promising to put the kind of advertising support behind Draught Bass that Interbrew were intending, and which would have had a beneficial effect upon the whole cask ale sector."
The Campaign for Real Ale said that as a consumer group it "welcomed the fact that the government has put the consumer first. But if the business is sold to another international group, what is the point of blocking the deal?"
Commentators agreed that Interbrew had completely missed the line the DTI would take. The head of European competition and regulation at the law firm Clifford Chance, Chris Bright, said: "I suspect they may have been wrongfooted in feeling that if it all went wrong, they could always get rid of Whitbread" û a move rejected by the Competition Commission. Another lawyer said: "You can't say, 'there are duopolies everywhere else, why not have one here as well?' Regulators don't like that sort of analysis.
However, everybody agreed that Bass had played its hand perfectly in making the sale of its breweries to Interbrew unconditional on approval by the British competition authorities, and getting a premium price around 50% higher than Interbrew is likely to receive if and when it sells on.
