The Competition and Markets Authority (CMA) has given the go-ahead to the brewing joint venture between Carlsberg UK and Marston’s.
The two firms announced back in May that they had agreed to create a £780m business which will see them merge their operations. Both firms will inject their brewing and distribution assets into the venture that will be called the Carlsberg Marston’s Brewing Company.
Back in August, the CMA revealed that it was looking into the deal to assess whether it could result in a “substantial lessening of competition” in the supply of beer and cider in the UK, and so require an in-depth investigation.
Consumer groups such as CAMRA had called on the CMA to investigate the deal, saying it could reduce the choice for pubgoers.
The CMA announced today that it had now cleared the proposed joint venture.
A statement from the regulator said: “As pubs currently owned or operated by Marston’s might choose to sell fewer independent brands after the merger in favour of more Carlsberg products, the CMA considered whether access to pubs by smaller independent brewers could be adversely affected as a result of the deal.
“The CMA found, however, that Marston’s pubs form only a small part of the potential UK customer base for brewers, and that independent brewers would continue to have sufficient access to pubs after the merger, allowing them to compete effectively.
“The CMA also considered whether combining the wholesaling services that both companies provide, through which they distribute their own and other producers’ drinks to pubs and restaurants, could raise competition concerns. While the establishment of the joint venture means that the two businesses are likely to distribute each other’s products more frequently, potentially leaving less room to take on other brands, the CMA found that brewers will continue to have sufficient alternative wholesalers to choose from after the merger.
“In relation to their role as brewers, the CMA found that Carlsberg and Marston’s have different areas of focus, meaning competition between the two businesses is generally limited at present, with Carlsberg largely focusing on the production of lager and Marston’s focusing on ale. They also face several competitors in all of the product categories where they are both active.
“The CMA’s investigation has therefore concluded that the deal does not give rise to competition concerns.”
In a brief statement, Marston’s welcomed the regulator’s decision and said the transaction will now complete at the end of this month.
NAM Implications:
- But one of many yet to come…
- Time to reassess relative competitive appeal in these categories…
