The UK Competition Commission has today (Tuesday) set out the main issues and potential remedies it will be addressing in its investigation of Interbrew's acquisition of Bass' brewing interests.
It has asked Interbrew to respond, but stressed that no conclusions had yet been reached on whether the deal or any aspects of it operate against the public interest.
The Competition Commission will submit its report to the Secretary of State for Trade & Industry on December 6, 2000
Attention will paid to current distribution arrangements, including Interbrew's acquired stake in Tradeteam, and the supply agreements running with the Bass and Whitbread estates û issues now complicated by Whitbread and Bass' pub sell-off plans.
The issues the Commission intend to consider are as follows:
1. The effects of the merger on brewing;
2. The effect of the merger on the wholesaling and distribution of beer;
3. The effect of the merger on the retailing of beer;
4. Possible adverse effects on the public interest;
5. Possible remedies
It said that "in the hypothetical situation that the merger is found to be against the public interest" remedies to be considered would be:
(a) Divestment of the Bass business in its entirety; or possibly without its activities in Scotland and Northern Ireland;
(b) Divestment of the Whitbread brewing business, either with or without the rights to the Stella Artois brand;
(c) Divestment of such brands and associated brewing and wholesaling capacity as would enable the creation of a competitive fourth brewer-wholesaler;
(d) Divestment of the wholesaling and distribution businesses of Bass and/or Whitbread;
(e) Divestment of the Interbrew/Bass interest in Tradeteam and re-negotiation of the supply contract with Tradeteam on an arms-length and non-preferential basis;
(f) Termination of the supply agreements with the retained estates of Bass and/or Whitbread;
(g) Requirement not to discriminate in pricing at the brewing level, that is, to avoid differentials not justified by cost differences between sales to wholesalers and direct sales to retailers;
(h) Requirement not to discriminate in pricing at the wholesaling level, that is, to avoid differentials not justified by cost differences between sales of Interbrew beers and sales of competitors' beers;
(i) Requirement not to engage in line forcing at both brewing and wholesaling levels, that is, not to require, or induce through differential terms, the purchase of a full range of Interbrew products.
• Published online 24/10/2000 09:00
It has asked Interbrew to respond, but stressed that no conclusions had yet been reached on whether the deal or any aspects of it operate against the public interest.
The Competition Commission will submit its report to the Secretary of State for Trade & Industry on December 6, 2000
Attention will paid to current distribution arrangements, including Interbrew's acquired stake in Tradeteam, and the supply agreements running with the Bass and Whitbread estates û issues now complicated by Whitbread and Bass' pub sell-off plans.
The issues the Commission intend to consider are as follows:
1. The effects of the merger on brewing;
2. The effect of the merger on the wholesaling and distribution of beer;
3. The effect of the merger on the retailing of beer;
4. Possible adverse effects on the public interest;
5. Possible remedies
It said that "in the hypothetical situation that the merger is found to be against the public interest" remedies to be considered would be:
(a) Divestment of the Bass business in its entirety; or possibly without its activities in Scotland and Northern Ireland;
(b) Divestment of the Whitbread brewing business, either with or without the rights to the Stella Artois brand;
(c) Divestment of such brands and associated brewing and wholesaling capacity as would enable the creation of a competitive fourth brewer-wholesaler;
(d) Divestment of the wholesaling and distribution businesses of Bass and/or Whitbread;
(e) Divestment of the Interbrew/Bass interest in Tradeteam and re-negotiation of the supply contract with Tradeteam on an arms-length and non-preferential basis;
(f) Termination of the supply agreements with the retained estates of Bass and/or Whitbread;
(g) Requirement not to discriminate in pricing at the brewing level, that is, to avoid differentials not justified by cost differences between sales to wholesalers and direct sales to retailers;
(h) Requirement not to discriminate in pricing at the wholesaling level, that is, to avoid differentials not justified by cost differences between sales of Interbrew beers and sales of competitors' beers;
(i) Requirement not to engage in line forcing at both brewing and wholesaling levels, that is, not to require, or induce through differential terms, the purchase of a full range of Interbrew products.
• Published online 24/10/2000 09:00
