THE independent pub trade in Scotland has warned it retains serious concerns for the industry over Heineken’s controversial takeover of nearly 2,000 Punch Taverns outlets, given the green light yesterday.
The competition watchdog signalled its approval of the £300 million deal in a statement to the stock market, stating that it would accept Heineken’s offer to sell off outlets to ease concerns it could lead to reduced competition and consumer choice in certain areas.
In June Dutch brewing giant Heineken, which currently owns around 104 leased and tenant pubs in the UK, offered to sell outlets in 33 areas to enable to deal to go through. That came after an initial investigation by the Competition and Markets Authority (CMA) found that the merger could lead to price increases or a deterioration in the quality of service offered in those areas.
The Scottish Licensed Trade Association (SLTA) has previously warned that the deal would create a “monster” pub chain that could “destabilise an already fragile industry”. And yesterday it repeated concerns there could be a big fall-out from the deal.
The organisation, which represents independent publicans, suggested the deal would starve community pubs of investment at the expense of the “upmarket” bars in the Punch stable covered by the merger. It claimed it would make it more difficult for local brewers to have their products stocked in the outlets in question, and heap more pressure on “tied pubs”, which have no option but to buy beer from landlords such as Heineken.
A spokesman said: “Heineken may have had their merger with Punch Taverns green-lit, but we still have serious concerns. They (Heineken) themselves say that they plan on “entrepreneurial licensees”, which will probably mean that they will invest in chosen few – upmarket, city-centre types - definitely not the community-style pubs who often suffer investment bias and financial restrictions under tied arrangements.
“Heineken will impose at least 85 per cent of their own products in Punch pubs, leaving little room for others. It’s restrictive and will disadvantage home-grown producers.”
A spokesman for Heineken, which has had a presence in the UK pub trade since it acquired Edinburgh-based Scottish & Newcastle alongside Carlsberg in 2008, said: “We welcome today’s announcement from the CMA that, following consultation, our proposed undertakings have been accepted and there are no outstanding concerns.
“We therefore expect to complete our acquisition as planned by the end of August.”
The deal which will see Heineken acquire 1,895 pubs is part of a wider £400m transaction which will see the whole Punch Taverns estate broken up. Under the structure of the deal, private equity giant Patron Capital will acquire the entire Punch estate, and then immediately offload nearly 2,000 pubs to Heineken. Patron will continue to trade the rump of the Punch portfolio of more than 1,300 sites, meaning that the company name will carry on.
Punch has around 230 outlets in Scotland, including 25 hotels.
The CMA said in its statement: “Heineken has offered to sell pubs in each of the affected areas to preserve competition and ensure customers in these locations do not lose out.
“Before reaching a final decision, the CMA carefully assessed and consulted publicly on these proposed undertakings. The CMA is satisfied that its concerns have been addressed and has therefore decided that the merger will not be referred for an in-depth phase 2 investigation.”
The last day of trading in Punch shares is now expected to be on Wednesday (August 23).
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