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UK: Competition body clears Heineken, FEMSA Cerveza deal

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The UK's competition watchdog has cleared Heineken's acquisition of Mexican brewer FEMSA Cerveza ahead of a shareholder vote on the deal at Heineken headquarters.

The Office of Fair Trading (OFT) said yesterday (20 April) that it has no concerns that the deal would weaken competition in the UK beer market.

A green flag for the deal in the UK comes as Heineken prepares to ask shareholders to approve the acquisition, at an annual general meeting to be held in the Netherlands tomorrow (22 April).

FEMSA Cerveza's Sol and Dos Equis beers are currently distributed in the UK by Molson Coors, while its Bohemia brand is handled by Inspirit Marketing.

Heineken already supplies a quarter of all lager in the UK by volume.

A small number of unnamed parties complained to the OFT that the deal could hurt the market by expanding Heineken's portfolio. But, the watchdog rejected the complaints.

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"Even on the most conservative candidate markets – the supply of premium bottled lager to the on-trade and to the off-trade in Northern Ireland and in Great Britain – the merger represents a small increment to Heineken’s market share," the OFT said.

"Heineken will continue to face significant competition from competitors such as Anheuser-Busch InBev, Carlsberg and Miller [Molson Coors] post-merger, and market enquiries indicated that the brands of the merger parties are not particularly close competitors."

Earlier today, Heineken reported a 3.5% drop in beer sales in the first quarter of 2010.


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