Interbrew face EU opposition over Beck's

Related tags Interbrew European union

Interbrew's £1.2bn Beck's deal faces opposition from the European Union.The company owns the Stella Artois brand and the deal would see it take...

Interbrew's £1.2bn Beck's deal faces opposition from the European Union.

The company owns the Stella Artois brand and the deal would see it take control of two of the UK's best-selling premium lagers.

Some believe this would give it an unfair advantage in the market.

The European Commission's concerns prompted the Belgian brewer to offer concessions this week in attempt to obtain a speedy clearance of the deal.

The European Union antitrust authorities have a week to decide whether to clear the deal or to open up a four month investigation.

An investigation would set back the deal, and would raise investor-fears that it could eventually be blocked.

Interbrew, which last year bought the beer business of UK groups Bass and Whitbread, is now the second biggest brewer in the world.

It is the second time it has faced antitrust concerns over its strong position in the UK market in the last 12 months. Last month the government ordered Interbrew to sell the Carling brand, to reduce its share of the British beer market following the Bass and Whitbread acquisitions. The sale of Carling is a huge loss as it is currently Britain's biggest selling beer.

When the Beck's deal was first announced, the Belgian brewer said it did not believe there would be any regulatory problems in the UK. At the moment Scottish & Newcastle (S&N) produces Beck's under a licence and pays royalties on sales to the German group.

S&N 's involvement and the contract which expires in 2012 is the main stumbling block. The EU fear that if Interbrew bought Beck's it would have an incentive to co-ordinate prices with S&N as the two would have commanding control of the premium beer sector.

One option would be for Interbrew to severe its links with Beck's in the UK by giving up royalties on the sales until 2012 in exchange for a lump sum from S&N.

Interbrew has confirmed it has offered limited concessions to the EU regulator. The commission declined to comment.

Related news:

Decision made on Interbrew's takeover of Bass Brewers (18 September 2001)

Beck's shareholders back sale to Interbrew (04 September 2001)

Interbrew deal for Beck's raises competition questions (06 August 2001)

Bidding war looms for Beck's (20 July 2001)

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