UK: Interbrew welcomes OFT solutions to competition concerns
And, in a statement released today, the OFT has invited third parties to comment on the proposals by 18 July.
Interbrew said it welcomed the consultation paper but warned that two of the solutions, selling all of Bass Brewers or disposing of all of Whitbread, would "in reality, significantly reduce the competitive dynamics of the UK market, to the detriment of consumers".
The first of the OFT's four remedies, called "The Bass Brewers Remedy" is the same as the original ruling and calls on Interbrew to divest the entire UK brewing interests of Bass Brewers to a buyer approved by the director general of the OFT.
"The Carling Brewers Remedy" would see Interbrew retain Bass Brewers in Scotland and Northern Ireland, the breweries at Glasgow and Belfast and Tennent's and Bass Ale brands.
The remainder of the Bass Brewers UK business, including the Carling brand, together with the Scottish element of Bass Brewers' national beer supply contracts, would be sold to a buyer approved by the director general.
The third solution has been proposed by Interbrew and is called "The International Brewer Remedy". Here Interbrew has proposed a solution intended to strengthen any international brewer already represented in the UK market.
The proposal is that Interbrew divests the Scottish and Northern Ireland businesses of Bass Brewers including existing rights to the Tennent's, Grolsch, Caffrey's, Worthington and Stones brands (or some other appropriate brand combination). The deal would also include the necessary supporting brewing capacity, beer supply agreements and certain distribution assets.
Interbrew would retain the Carling, Bass Ale and other minor brands and some brewing capacity.
The final proposed solution is "The Whitbread Brewing Company Remedy". This would require the divestment of the former Whitbread brewing business together with licence rights to the Stella Artois brand to a buyer approved by the director general.
Third parties have been invited to comment on three fronts, firstly on which of the solutions remedies the adverse effects found by the CC and secondly how should a choice be made between them.
Third parties are also asked to comment on any time period allowed for a divestment to be completed.
In a statement Interbrew said it "welcomes the constructive consultation paper".
It went on: "Interbrew has always favoured a sustainable, competitive
UK brewing market, believing this to be in the interests of customers, employees
Interbrew is, however, strongly of the opinion that an outright sale of the UK business of Bass Brewers or a disposal of the former Whitbread Beer Company would, in reality, significantly reduce the competitive dynamics of the UK market, to the detriment of consumers."
Hugo Powell, CEO of Interbrew, said: "We have remained flexible and pragmatic throughout this process. We look forward to a fair and speedy resolution to this matter and will work to create a sustainable competitive UK beer market."
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