Heineken must respond to concerns raised by the Competition and Markets Authority (CMA) that its proposed purchase of 1900 sites from Punch, would reduce competition in some areas of the UK.
The CMA has identified 33 local areas where their pubs would not face sufficient competition after the merger, which could lead to 'price increases or a deterioration in the quality of the service on offer'.
The CMA also raised concerns that the merger would close off an important route to market for brewers that compete with Heineken. However, the pubs being acquired make up around 4% of the UK market, and so does not represent a major route for brewers.
The company now has until June 20 to respond to the concerns or face an in-depth investigation into the merger.
Andrea Coscelli, CMA acting chief executive and decision maker in the case, said: 'We have listened very carefully to a range of concerns about this merger. The companies will own less than 10% of all British pubs after any deal, but we are concerned about the loss of competition for pub goers in a number of local areas. Without sufficient competition from rivals, pubs in these areas might be able to raise prices or worsen the service they offer customers.
'Heineken will now have the chance to offer proposals to address these concerns - otherwise we will carry out an in-depth investigation.'
David Forde, managing director for Heineken UK added, 'We welcome this positive step towards completing our acquisition of Punch A. This decision by the CMA acknowledges that there are only a small number of local areas where competition may be diminished due to our acquisition of the pubs in Punch A. We are confident we can offer the CMA suitable undertakings to satisfy their concerns.'
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If you don't already know, Imbibe Live is the innovative and interactive annual exhibition for anyone who sources, buys or serves drinks in the licensed on-trade. From sommeliers to buyers and from managers to publicans and bartenders, this essential date in the drinks calendar will see the industry’s finest come together.
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