CMA probes Punch & Heineken deal

Claire Dodd

Claire Dodd

16 February 2017

The Competition and Markets Authority (CMA) has launched an investigation into Heineken’s proposed acquisition of part of the Punch Taverns pubs portfolio.

The watchdog is set to assess whether the brewer and pub operators bid to purchase 1900 sites from Punch, could reduce competition and choice for customers. The deal would make the Heineken the UK's third-largest pub group, after Greene King and Enterprise Inns.

The announcement comes after concerns were raised by numerous trade bodies, including the Scottish Licensed Trade Association (SLTA) and CAMRA. Both have penned open letters calling for assurances, particularly on the breadth of product range available to licensees, with the SLTA fearing a 'monster-tie'.

In CAMRA’s letter, national chairman Colin Valentine, said: 'We note that Heineken already has an existing market share of 24 per cent in the on-trade and has a declared policy of restricting the access of competitors to the pubs that they own.'

However, Heineken confirmed last week that it would continue to work with SIBA (Society of Independent Brewers) to ensure that tenants continue to have access to a wide range of beers from small, independent breweries, if the deal goes through.

Lawson Mountstevens, Managing Director of Heineken’s Star Pubs & Bars said: 'We are aware that some Punch tenants are concerned that we will force them to purchase only Heineken brands. We want to confirm that is not the case. Our commitment to work with SIBA should give tenants confidence. As we have consistently said, we will start with what is right for each of the pubs joining us and we will work together with licensees to ensure they have the right drinks on offer to suit the specific needs of each pub.'

The CMA has said the in-depth merger investigation could last up to 24 weeks, however, the first phase will conclude on 24 April 2017. Interested parties are invited to submit their views by 2 March 2017.

A Heineken spokesman said: 'This morning’s announcement confirms an important and fully expected stage in the process to finalise our acquisition of the Securitisation A pubs from Punch and Heineken will be fully co-operating with the CMA.'

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