Sale of the century?
Interbrew's disposal of Carling Brewers means some of Britain's best selling brands are up for grabs. Kerry Rogan looks at how this will affect the trade
After more than a year of legal wrangling, a decision has finally been made on Interbrew's £2.3bn takeover bid for Bass Brewers.
When trade and industry secretary Patricia Hewitt announced the Government's decision last week, it ended 15 months of speculation.
She told Interbrew to sell either Bass Brewers or Carling Brewers, and unsurprisingly, later the same day the Belgian brewing giant confirmed it will dispose of Carling, before the Government's deadline of February 2002.
The decision means Interbrew will keep the businesses of Bass Brewers in Scotland and Northern Ireland, together with the breweries at Glasgow and Belfast and the Tennent's and Bass Ale brands.
The remainder of the Bass Brewers UK business, including the Carling brand and the Scottish element of Bass Brewers' on-trade national account customers, will be sold.
"I have accepted the further advice of the director general of fair trading (DGFT) that the adverse effects of this merger can be remedied by the divestment to a buyer approved by the DGFT either of Bass Brewers or of the businesses and assets known as Carling Brewers," said Ms Hewitt.
Already potential buyers for Carling are emerging.
Heineken and Anheuser-Busch are said to be the top contenders in the war for the brand when it is put on the market later this year, although analysts say South African Breweries is also in the running.
The road will not be easy for any buyer, however, who will have to be approved by the Government before a sale goes through.
While big companies are getting ready to step into the gap left by the sale, the repercussions of the decision for the industry remain to be seen.
Many trade leaders welcomed Ms Hewitt's announcement, but others fear the effect it will have on cask ale and in fact, the pub trade as a whole.
The Association of Licensed Multiple Retailers (ALMR) has made it clear that it has always supported, and continues to support, the Bass Brewers remedy.
"The crucial thing now will be to assess which of the potential buyers of either the brands or the business will provide a competitive market place for licensed retailers," a statement from the ALMR said.
When the takeover bid was first announced, the Independent Family Brewers of Britain warned: "Within a few years it could be the exception rather than the rule to find a pub that offers traditional draught beer."
Some experts believe the Government's decision does not go far enough. Iain Loe, spokesman for the Campaign for Real Ale, said he thought important questions, such as the future of the Bass museum in Burton, were left unanswered by Ms Hewitt's statement.
He also pointed out that the sale of Carling will probably mean the sale of Bass breweries at Alton in Hampshire, Tadcaster, Birmingham and Burton, while Interbrew retains the breweries in Ulster and Glasgow's Wellpark.
"Caffreys is brewed at Ulster and the brand is being sold, while Bass Ale is brewed at Burton and that brewery will be sold," he said. "I'd like to know what that will mean."
CAMRA intends to ask Interbrew for a meeting to determine its plans.
Not surprisingly Interbrew has welcomed the decision, which leaves it with a 15 per cent share of the UK market. The Bass Brewers remedy would have left it with 10 per cent.
"We are pleased with the decision, which clears the way for us to strengthen our UK platform as well as our international portfolio," said Hugo Powell, chief executive of Interbrew.
The repercussions for the pub trade are yet to be seen. Who buys the package and what they and Interbrew decide to do with some of Britain's best selling brands could have wide-reaching implications, but for now it is just a case of watching and waiting.
Bass and Interbrew - the story so far....
June 2000 |
Interbrew buys Bass Brewers for £2.3bn, subject to permission from the European Commission. UK brewers express concern. |
August 2000 |
Trade secretary Stephen Byers requests that Britain be allowed to rule on the takeover. |
September 2000 |
The European Commission says Britain will be allowed to decide whether to allow Interbrew's takeover of Bass Brewers. The deal is referred to the Competition Commission. |
November 2000 |
Interbrew says it may have to axe some of the beer supply contracts acquired in its takeover of Whitbread and Bass' breweries as there are concerns it now owns 53 per cent of UK beer distribution. |
January 2001 |
Interbrew's takeover of Bass Brewers is blocked by trade secretary Stephen Byers because of fears it would push up prices for publicans and slash the choice of beer. |
February 2001 |
Interbrew says it is prepared to write off losses of £750m if it has to go ahead with selling Bass Brewers. |
April 2001 |
Interbrew pledges to continue buying other brewers despite the setback of losing Bass. |
May 2001 |
The Judicial Review decides the Competition Commission acted unfairly in recommending the deal should be blocked and the high court orders the Government to reconsider its decision to block Interbrew's acquisition of Bass Brewers. |
July 2001 |
The Office of Fair Trading launches a consultation on four options for the future of Bass Brewers, two of which would see it broken up. The Carling remedy, which would mean the sale of the Carling brand and selected parts of Bass Brewers, and the International Brewer remedy, which would mean the sale of the majority of Bass Brewers excluding Carling, Bass Ale and some minor brands, are favoured. |
August 2001 |
The Carling remedy emerges as the most likely solution. |
September 2001 |
A decision on the future of Bass Brewers is delayed after the Government is lobbied by those fearful that the Carling remedy will stifle competition in Scotland. |
September 18 2001 |
Interbrew confirms it is to sell off Carling after Patricia Hewitt gives the brewing giant until February 2002 to dispose of either Bass Brewers or Carling Brewers. |
September 20 2001 |
Heineken and Anheuser-Busch are said to be the top contenders in the bidding war for Carling. |
Bass facts
- Bass Ale was first brewed in Burton-on-Trent by William Bass in 1777 making it one of Britain's oldest brands.
- In 1913 Picasso painted the Bass bottle and since then it has featured in more than 30 paintings.
- Buffalo Bill, aka William Cody, is reputed to always have taken a bottle of Bass with him when he went hunting.
- 12,000 bottles of Bass were reported to have been found among the wreckage of the Titani
