HEINEKEN has offered to sell pubs across the UK to ease competition concerns over its £300 million acquisition of part of the Punch Taverns estate.
The Competition and Markets Authority (CMA) has said there are “reasonable grounds for believing that these proposals, or a modified version of them, might be acceptable to remedy the competition concerns”.
But the Scottish Licenced Trade Association (SLTA), which has vigorously opposed the deal, said it was a box-ticking exercise that would not address issues over consumer prices and the possibility of job losses and pub closures.
The CMA said in February that the acquisition of 1,900 pubs could reduce competition in 33 local areas across Great Britain, leading to an increase in the price of a pint, or a deterioration in the quality of the service offered.
The adjudicator will now consider whether Heineken’s proposals address its concerns and remove the need for an in-depth investigation.
A spokesman for Heineken said: “We welcome confirmation from the CMA that only a small number of pubs are required to be sold. It’s a sensible outcome and good news for pub-goers across the UK, who will see the benefit of well invested pubs in their communities.”
But Paul Waterson, STLA chief executive, repeated calls for an in-depth investigation, saying: “Heineken’s offer to sell off outlets to appease the CMA may well tick a box where competition is concerned, but it does nothing to address the significant list of issues voiced by the industry when this merger was announced.
“Prices for consumers will still rise. Local brewers’ access to market will still be restricted due to stocking requirements and tenants will suffer through rent, stock and service price increases with job losses and pub closures sure to follow.”
The Dutch brewing giant’s purchase of 1,900 Punch Tavern pubs will make it the third largest operator in the UK, with almost 3,000 outlets.
The acquisition of London-listed Punch is being carried out by Patron Capital Partners, which will assume ownership of 4,400 units for £405m, and immediately sell 1,900 of these to Heineken for £305m.
Through its Star Pubs and Bars division Heineken, which also makes products including Foster’s, Kronenbourg 1664 and Strongbow, has been a pub owner in the UK since 2008 when it acquired Scottish & Newcastle.
The company estimates that it has invested £20m per year in its pubs since 2014. The addition of the Punch pubs will bring refurbishment and rejuvenation to premises, it has said, making them more fitting for their local communities.
Mr Waterson said: “Only recently Heineken were celebrating investment in their tied estate, now they are more than happy to sell off pubs, some of which may also be family homes, simply to satisfy the CMA.
“Offering to sell these premises is further proof of Heineken’s disregard for tied tenants as the company looks to deliver value for only people it cares about – shareholders. The SLTA has spent many years campaigning to get a fairer deal for tied tenants in Scotland and allowing this deal to go through would be a step back for the industry.”
One of the SLTA’s main concerns is that pubs will be forced to purchase Heineken products, leading to increased sales for the brewer, but less freedom for the tenant.
Unlike in England and Wales, there is no pub code in Scotland, meaning pub company tenants cannot opt out of buying products from their owners. Legislation to introduce such a measure in Scotland is being pushed in Holyrood.
No details have yet been published on the precise number of units Heineken has offered to sell, but the CMA has until August 22 to consider whether to accept the plan, but could extend this to October. If agreement cannot be reached, the deal will be referred for an in-depth investigation.
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