Marston’s clear final hurdle in deal to join up with Carlsberg
A barrier to the creation of Marston’s massive brewing joint venture with global beer giant Carlsberg has been removed.
The new Carlsberg Marston’s Brewing Company, which will have its headquarters in Wolverhampton, has been cleared by the Competition and Markets Authority.
The CMA decision that the deal does not give rise to competition concerns. It followed an investigation into several possible ways in which the deal could harm competition in the supply of beer and cider across the UK.
Wolverhampton-based Marston’s spokesman Jeremy Eaton said: “We are pleased to report that the Competition and Markets Authority have cleared the proposed joint venture, and the antitrust condition to completion has now been satisfied.
“The transaction will now complete at the end of October.”
Both companies are large brewers of beer and cider, as well as offering related services, such as wholesale supply of their own and other producers’ drinks to pubs and restaurants. Marston’s also owns around 1,400 pubs across the UK.
As pubs currently owned or operated by Marston’s might choose to sell fewer independent brands after the merger in favour of more Carlsberg products, the CMA considered whether access to pubs by smaller independent brewers could be adversely affected as a result of the deal.
The CMA found, however, that Marston’s pubs form only a small part of the potential UK customer base for brewers, and that independent brewers would continue to have sufficient access to pubs after the merger, allowing them to compete effectively.
The CMA also considered whether combining the wholesaling services that both companies provide, through which they distribute their own and other producers’ drinks to pubs and restaurants, could raise competition concerns.
Competitors
While the establishment of the joint venture means that the two businesses are likely to distribute each other’s products more frequently, potentially leaving less room to take on other brands, the CMA found that brewers will continue to have sufficient alternative wholesalers to choose from after the merger.
In relation to their role as brewers, the CMA found that Carlsberg and Marston’s have different areas of focus, meaning competition between the two businesses is generally limited at present, with Carlsberg largely focusing on the production of lager and Marston’s focusing on ale.
They also face several competitors in all of the product categories where they are both active.
The Campaign for Real Ale had called for an investigation of the £780 million joint venture between the UK brewing arms of Carlsberg and Marston’s, saying it would reduce the choice of beers available to pubgoers.
The deal valued Marston’s brewing business at £580m and Carlsberg’s UK brewing division at £200m.
Marston’s will own a 40 per cent stake in the joint venture and will use the plans to focus on its pub and accommodation business.
Tomasz Blawat, managing director of Carlsberg UK, said: “Today’s decision is a significant milestone in the formation of the new company.”
