Heineken’s Acquisition Of Punch May Reduce Competition Says CMA

Heineken’s planned takeover of Punch Taverns pubs will face an in-depth investigation unless the Dutch brewer addresses competition concerns in 33 locations, Britain’s Competition and Markets Authority (CMA) said today.

Heineken must now offer proposals to address these concerns by 20 June or face an in-depth investigation into the merger.

As part of its original investigation, the Competition and Markets Authority (CMA) examined local areas where both companies owned pubs and found 33 where their pubs would not face sufficient competition after the merger, “which could lead to price increases or a deterioration in the quality of the service on offer”.

Heineken said it intended to offer satisfactory undertakings and that it was confident the CMA would then be able to approve the acquisition without an in-depth study.

“This decision by the CMA acknowledges that there are only a small number of local areas where competition may be diminished due to our acquisition of the pubs,” Heineken UK Managing Director David Forde said in a statement

While concerns were raised by the industry that the merger would close off a major route to market for brewers that compete with Heineken, the CMA found this was not a main route to market for brewers.

The CMA also suggested there would be a limited reduction in the range of beer and cider available in Heineken-owned pubs and that the company would not have a strong incentive to reduce the range of beer and cider for the risk of losing business.