European Commission (EC) clearance for Pernod Ricard's proposed takeover of Allied Domecq still has some hurdles to clear, according to recent reports. Citing sources close to the case, news agency AFX said yesterday (20 June) that EC approval will be granted this week, but with conditions concerning the companies' distribution network, particularly in Spain.

Speaking to AFX, one source said: "The main issue is (connected to) distribution, as the combined group will have a strong network in Spain and will have to offer some type of behavioural commitment to ensure other companies don't get pushed out. There was also a problem with the gin market and the commission has asked for a little bit more there."

Pernod has offered a solution to competition concerns in the gin market, a source told AFX, but more specific details were not forthcoming.

The French company is still waiting for approval from both its and Allied's shareholders, as well as clearance from the US Federal Trade Commission. Pernod hopes to have the deal sewn up by the end of next month.