Britain's smallest brewers have backed Interbrew against Stephen Byers over the rejection of the Belgian giant's bid for Bass.
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 of "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."
• On the pubs side, reaction was split, with 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."
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."
• Interbrew's chief executive, Hugo Powell, said the ruling "defies logic and is clearly disproportionate to the competition issues at stake". Interbrew said it was "reviewing all its options, which could include seeking a judicial review of the decision".
Powell said: "Nobody is to blame for this decision - it came as a complete surprise to the huge majority of investors, analysts and our management. We have a lot of work to do to clarify the thinking of the authorities. A lot of what they have said doesn't make sense."
The only legal challenge Interbrew could mount to the decision would be to seek a judicial review. But the courts have rejected each of the 10 or so previous attempts to get a minister's decision on a competition report overturned.
• Nigel Popham, industry analyst at the broker Teather & Greenwood, said: "I think it's a significant shock to everybody. But frankly, it's always unwise to try to predict what a government will do, particularly in an election year ... I think the edict came from Tony Blair that he wanted to avoid job losses at all costs."
On the DTI's insistence that Interbrew must now sell Bass to a buyer approved by the Office of Fair Trading, Popham said: "Frankly, potential buyers are pretty thin on the ground. Strategically, the most obvious buyer is SAB, but they haven't got the biggest of wallets. Heineken could afford it, but from a brand point of view, that might not be the best move for them."
• 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 responsibility 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.
• 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?"
• Colin Povey, the new chief executive of Carlsberg's UK brewing arm, Carlsberg-Tetley, said it was still interested in Bass's brewing assets provided it could get them at the right price and with the right sort of regulatory clearances. Carlsberg values them at £1.5bn. But Carlsberg could run into the same kind of competition problems as Interbrew, simnce Carlsbrerg/Bass would have a 35pc market share.
• Financial buyers for Bass could include Hicks Muse Tate and Furst, Texas Pacific (which is, ironically, the majority shareholder in Hugh Osmond's Punch Group) and CVC. City sources said Interbrew could suffer a loss of up £800m, on an estimate that Bass Brewers would now be worth between £1.5bn and £2bn.
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 of "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."
• On the pubs side, reaction was split, with 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."
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."
• Interbrew's chief executive, Hugo Powell, said the ruling "defies logic and is clearly disproportionate to the competition issues at stake". Interbrew said it was "reviewing all its options, which could include seeking a judicial review of the decision".
Powell said: "Nobody is to blame for this decision - it came as a complete surprise to the huge majority of investors, analysts and our management. We have a lot of work to do to clarify the thinking of the authorities. A lot of what they have said doesn't make sense."
The only legal challenge Interbrew could mount to the decision would be to seek a judicial review. But the courts have rejected each of the 10 or so previous attempts to get a minister's decision on a competition report overturned.
• Nigel Popham, industry analyst at the broker Teather & Greenwood, said: "I think it's a significant shock to everybody. But frankly, it's always unwise to try to predict what a government will do, particularly in an election year ... I think the edict came from Tony Blair that he wanted to avoid job losses at all costs."
On the DTI's insistence that Interbrew must now sell Bass to a buyer approved by the Office of Fair Trading, Popham said: "Frankly, potential buyers are pretty thin on the ground. Strategically, the most obvious buyer is SAB, but they haven't got the biggest of wallets. Heineken could afford it, but from a brand point of view, that might not be the best move for them."
• 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 responsibility 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.
• 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?"
• Colin Povey, the new chief executive of Carlsberg's UK brewing arm, Carlsberg-Tetley, said it was still interested in Bass's brewing assets provided it could get them at the right price and with the right sort of regulatory clearances. Carlsberg values them at £1.5bn. But Carlsberg could run into the same kind of competition problems as Interbrew, simnce Carlsbrerg/Bass would have a 35pc market share.
• Financial buyers for Bass could include Hicks Muse Tate and Furst, Texas Pacific (which is, ironically, the majority shareholder in Hugh Osmond's Punch Group) and CVC. City sources said Interbrew could suffer a loss of up £800m, on an estimate that Bass Brewers would now be worth between £1.5bn and £2bn.
