A clear hint came from the Office of Fair Trading last week that it may recommend spinning off Carling and letting Interbrew keep the rest of Bass Brewers.
The OFT put forward four different solutions to a situation thrown into uproar when the original ruling by the secretary of state for trade and industry that Interbrew must sell all of Bass Brewers was rejected by the High Court on the grounds that Interbrew had not been given a chance to state its case properly.
The OFT's four different plans are:
o the sale by Interbrew of Whitbread Brewing Company and the rights to Stella Artois
• a "Celtic Fringe" sale of the Tennent's and Caffrey's operations in Scotland and Northern Ireland, leaving Interbrew with Carling
• selling Carling and instead leaving Interbrew with the "Celtic fringe"
• the original DTI ruling, the complete disposal by Interbrew of Bass's breweries and beer brands.
Interested parties now have a fortnight, until July 18, to comment on which of the four proposals is most likely to cover the objections raised by the Competition Commission back in January over Bass Brewers' sale to Interbrew for £2.3bn.
The new secretary of state for trade and industry, Patricia Hewitt, is expected to receive the OFT's report by the end of the month.
The OFT's four solutions in full are:
1) The Bass Brewers remedy, the original solution recommended by the Competition Commission, that Interbrew should sell the entire UK brewing interests of Bass Brewers to a buyer approved by the Director General of Fair Trading.
2) The Carling Brewers remedy. Under this solution, the "Celtic fringe plan", Interbrew would retain Bass Brewers in Scotland and Northern Ireland, the breweries at Glasgow and Belfast and the Tennent's and Bass Ale brands.
The remainder of the Bass Brewers UK business, including the Carling brand, together with the Scottish element of Bass Brewers' national beer supply contracts, would be sold to a buyer approved by the Director General of Fair Trading.
Depending on who bought Carling, this would leave four big brewers in the UK, Scottish Courage
with 25%, Carling around 19%, Interbrew (minus the Heineken brands) 15% and Carlsberg-Tetley 12%.
The OFT's comment on this scenario is that "on the face of it" a Carling float off "might be capable of addressing" the adverse competition effects that led the Competition Commission to rule that Interbrew should sell all of Bass.
3) The "international brewer remedy", Interbrew's own proposal to the OFT, which is designed to strengthen any international brewer already represented in the UK market, such as Carlsberg, Heineken or Anheuser-Busch.
Under this plan, Interbrew would sell the Scottish and Northern Ireland businesses of Bass Brewers including: existing rights to the Tennent's, Grolsch, Caffrey's, Worthington and Stones brands (or some other brand combination), with the necessary supporting brewing capacity, beer supply agreements and certain distribution assets.
Interbrew would retain the Carling, Bass Ale and other minor brands and some brewing capacity. The proposal could also include the disposal by Interbrew of Bass Brewers' interest in the distribution service Tradeteam to a non-brewer.
4) The Whitbread Brewing Company remedy. Interbrew would sell the former WBC business together with licence rights to the Stella Artois brand in the UK to a buyer approved by the Director General. As Interbrew owns Stella and previously licensed it to Whitbread before it bought WBC last year, observers see this as the least likely scenario, especially since Interbrew has spent the past few months integrating WBC into its Western Europe operations.
Bass Brewers' managing director, Jerry Fowden, said: "The Carling and International Brewer remedies would be our preferred options and of the two we would prefer the International Brewers remedy."
Fowden said he believed this solution would result in the most competitive and stable market for the UK.
The full consultation document can be found at
www.oft.gov.uk/html/new/interbrew.htm
The OFT put forward four different solutions to a situation thrown into uproar when the original ruling by the secretary of state for trade and industry that Interbrew must sell all of Bass Brewers was rejected by the High Court on the grounds that Interbrew had not been given a chance to state its case properly.
The OFT's four different plans are:
o the sale by Interbrew of Whitbread Brewing Company and the rights to Stella Artois
• a "Celtic Fringe" sale of the Tennent's and Caffrey's operations in Scotland and Northern Ireland, leaving Interbrew with Carling
• selling Carling and instead leaving Interbrew with the "Celtic fringe"
• the original DTI ruling, the complete disposal by Interbrew of Bass's breweries and beer brands.
Interested parties now have a fortnight, until July 18, to comment on which of the four proposals is most likely to cover the objections raised by the Competition Commission back in January over Bass Brewers' sale to Interbrew for £2.3bn.
The new secretary of state for trade and industry, Patricia Hewitt, is expected to receive the OFT's report by the end of the month.
The OFT's four solutions in full are:
1) The Bass Brewers remedy, the original solution recommended by the Competition Commission, that Interbrew should sell the entire UK brewing interests of Bass Brewers to a buyer approved by the Director General of Fair Trading.
2) The Carling Brewers remedy. Under this solution, the "Celtic fringe plan", Interbrew would retain Bass Brewers in Scotland and Northern Ireland, the breweries at Glasgow and Belfast and the Tennent's and Bass Ale brands.
The remainder of the Bass Brewers UK business, including the Carling brand, together with the Scottish element of Bass Brewers' national beer supply contracts, would be sold to a buyer approved by the Director General of Fair Trading.
Depending on who bought Carling, this would leave four big brewers in the UK, Scottish Courage
with 25%, Carling around 19%, Interbrew (minus the Heineken brands) 15% and Carlsberg-Tetley 12%.
The OFT's comment on this scenario is that "on the face of it" a Carling float off "might be capable of addressing" the adverse competition effects that led the Competition Commission to rule that Interbrew should sell all of Bass.
3) The "international brewer remedy", Interbrew's own proposal to the OFT, which is designed to strengthen any international brewer already represented in the UK market, such as Carlsberg, Heineken or Anheuser-Busch.
Under this plan, Interbrew would sell the Scottish and Northern Ireland businesses of Bass Brewers including: existing rights to the Tennent's, Grolsch, Caffrey's, Worthington and Stones brands (or some other brand combination), with the necessary supporting brewing capacity, beer supply agreements and certain distribution assets.
Interbrew would retain the Carling, Bass Ale and other minor brands and some brewing capacity. The proposal could also include the disposal by Interbrew of Bass Brewers' interest in the distribution service Tradeteam to a non-brewer.
4) The Whitbread Brewing Company remedy. Interbrew would sell the former WBC business together with licence rights to the Stella Artois brand in the UK to a buyer approved by the Director General. As Interbrew owns Stella and previously licensed it to Whitbread before it bought WBC last year, observers see this as the least likely scenario, especially since Interbrew has spent the past few months integrating WBC into its Western Europe operations.
Bass Brewers' managing director, Jerry Fowden, said: "The Carling and International Brewer remedies would be our preferred options and of the two we would prefer the International Brewers remedy."
Fowden said he believed this solution would result in the most competitive and stable market for the UK.
The full consultation document can be found at
www.oft.gov.uk/html/new/interbrew.htm
