CMA warns Heineken to address concerns over Punch Taverns merger

(Source: CMA)
13/06/2017 - 09:03
The Competition and Markets Authority (CMA), the competition watchdog, has warned Heineken to address concerns over its acquisition of part of the Punch Taverns pub portfolio.

The CMA announced a first phase of the investigation into the merger in February, which lasted until April 25th, and identified 33 local areas where pubs would not face sufficient competition after the merger.

Andrew Coscelli, CMA acting chief executive and decision maker in the case, said: “We have listened very carefully to a range of concerns about this merger.

“The companies will own less than 10% of all British pubs after any deal, but we are concerned about the loss of competition for pub goers in a number of local areas. Without sufficient competition from rivals, pubs in these areas might be able to raise prices or worsen the service they offer customers.”

Heineken, which proposed to buy around 1,900 pubs from Punch Taverns, has until June 20th to address the CMA’s concerns and will refer the merger for an in-depth Phase 2 investigation if it fails to do so.

In response to the CMA’s decision, Heineken has said it intends to ‘offer acceptable undertakings’, without the need of a Phase 2 referral.

David Forde, managing director for Heineken UK, said: “We welcome this positive step towards completing our acquisition of Punch A.

“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 in Punch A.

“We are confident we can offer the CMA suitable undertakings to satisfy their concerns.”

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