THE COMPETITION Authority has expressed concern to EU regulators that the proposed acquisition of Cork brewer Beamish & Crawford by drinks giant Heineken might breach anti-trust rules, it emerged yesterday.
The deal is part of a £7.8 billion (€10.47 billion) joint bid for Beamish's parent, Scottish & Newcastle (S&N), by Dutch group Heineken and its Danish rival Carlsberg. They plan to divide S&N's interests, with Beamish stout and its sister brands going to Heineken, brewer of the eponymous lager.
The European Commission's anti-trust body is assessing the deal at large, but the Competition Authority in Dublin asked in recent days to examine whether aspects of the proposal would reduce competition in the Irish market.
This is the first such action by the authority. As a result of its intervention, the EU body has extended its review of the transaction at large until April 4th from March 18th.
Certain Irish drinks industry sources believe the integration of Beamish into Heineken would create an effective duopoly with Guinness owner Diageo, which has some 70 per cent of the Irish on-trade market. Heineken's brands have a 21 per cent share and Beamish's have 9 per cent.
Last month the Vintners' Federation of Ireland expressed concern about a potential reduction of competition if the deal proceeds.
The authority's spokeswoman acknowledged its request for a partial referral, but declined to comment beyond saying the request was made under article nine of the EU's merger regulations. The article empowers the commission to refer part or all of a deal to a national regulator in cases where it has been informed that a "concentration" in an industry threatens to significantly affect competition in the market.
The deal is subject to shareholder approval. While the EU body will make the ultimate determination, the authority will have 30 days initially to examine the implications for the Irish market. It can seek further information from deal participants, which would extend its initial review by 15 days. It can approve the deal after its initial examination or conduct a full-scale investigation into its impact on the sector.
Heineken owns Murphy's stout and Coors and Amstel lager. Beamish owns lager brands Miller and Foster's. Diageo owns Budweiser and Harp lager, Smithwick's ale, and the Irish rights for Carlsberg lager.
Some industry sources speculate that Beamish's management might advance a buyout if the Irish part of the S&N deal is disallowed for competition reasons. However, Heineken's Irish unit has indicated that the company is "committed to executing the deal in each of its relevant markets".
