Interbrew's Bass purchase faces tough remedies

Dame Helena Shovelton, who formerly chaired the Lottery Commission, has resurfaced as one of the four-strong team which is investigating Interbrew's £2.3bn purchase of Bass Brewers.

Dame Helena Shovelton, who formerly chaired the Lottery Commission, has resurfaced as one of the four-strong team which is investigating Interbrew's £2.3bn purchase of Bass Brewers.

The news emerged as the Competition Commission published an "issues and remedies statement" yesterday, outlining the potential adverse effects of the takeover and suggesting possible solutions.

The Commission listed a range of concerns covering the effects of the acquisition on brewing, beer distribution and the retailing. It invited Interbrew to respond to the points raised and stressed: "No conclusions have yet been reached ... about whether any matters operate or may be expected to operate against the public interest."

Interbrew, which is privately held and based in Belgium, acquired the Bass assets in June shortly after it announced the £400m purchase of Whitbread's beer division. Industry players, such as Hugh Osmond, the chairman of the UK's biggest pub owner Punch Group, have campaigned vociferously against the two deals. They have argued that the merger of Bass and Whitbread's UK beer businesses will give Interbrew an unacceptable position of dominance in both brewing and distribution.

Matthew Nayler, an analyst at Williams de Broe, said: "I can't recall ever having seen quite such a long list to guide people in making their concerns known .... I would have thought this must be negative for Interbrew."

The Commission invited interested parties to give views on, among other things, whether the Bass Brewers acquisition would create higher wholesale and retail prices, whether it would reduce the choice of brands available to consumers and whether the takeover would increase entry barriers into the brewing sector.

Among the possible remedies outlined was the complete or partial divestment of either the Bass or Whitbread units and the disposal or termination of supply contracts with the pub estates of Bass and Whitbread.

Analysts said it was unclear at this stage what outcome would be favoured by the Competition Commission. The team is due to hand its completed report to Stephen Byers, the Secretary of State for Trade and Industry, on 6 December. He will then have until 4 January make a decision.