Bass boss calls for free merger

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Related tags: Brewery, Hops, Beer, Interbrew, Chief executive

Iain Napier, set to become chief executive of the proposed Interbrew-Bass-Whitbread brewing giant in the UK, has reiterated his commitment to a...

Iain Napier, set to become chief executive of the proposed Interbrew-Bass-Whitbread brewing giant in the UK, has reiterated his commitment to a merger free of conditions.

The Bass Brewers chief is due to put his arguments to the Competition Commission in mid-November and a decision is expected by December 6 as to whether the Interbrew deals would give it a monopoly over distribution of beer in the pub market.

"I believe we have a very strong case and can see no reason why the deal should not be approved," he said. "The merger is in the interests of both consumers and the industry."

Licensees and pub operators can expect lower wholesale prices as a result of the synergies achieved by Interbrew's bringing together of two of Britain's biggest brewers, explained Napier, adding that Bass Brewers' prices to retailers had already fallen steeply in recent years.

"We will be looking to operators to pass the benefits on to their own customers to help address the problem of a declining beer market. This merger can work for us all if we use it to promote beer and give value to the consumer."

He believes pub chains should do more to pass declining wholesale prices on to customers.

The deal is opposed by pubcos, including Punch, which fear it will give Interbrew undue control over UK beer distribution to the detriment of small brewers and prices in pubs.

Napier was responding to the Competition Commission's issues and remedies statement which officially launched the public inquiry. It was triggered by trade and industry secretary Stephen Byers' referral of Interbrew's takeover of the Bass brewing operation in July.

The Commission may force Interbrew to sell the whole or large chunks of Bass Brewers. Other options include the sale of brands, breweries and wholesale and distribution operations, plus controls on pricing differentials.

Among other things, it questions whether the merged company will unfairly dominate the UK beer market, what the effect will be on pricing and whether there will be a reduced choice of brands.

Napier said: "The merger means that, with the exception of Scottish & Newcastle, vertical integration in brewing and retail has come to an end - that is an enormous prize for the Competition Commission."

He added: "I cannot see how brands are an issue. Carling has only 10.5 per cent of the market which is ridiculously low compared to other countries and other markets, and Stella is only 5.5 per cent of the market."

Napier confirmed that, subject to the approval of the merger, he would be appointed chief executive of the new company, which will be called Bass. Whitbread Beer Company managing director Miles Templeman was the other contender for the position.

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