Brewers' takeover plans blocked

The UK's Competition Commission has claimed it is "good news" for pub companies and customers after blocking a deal by two brewers to buy a rival's pub equipment supply arm.​ An inquiry into the pricing and supply of beer has also been called for by the commission.

Serviced Dispense Equipment (SDE), set up by Scottish Courage and Carlsberg to handle the supply and maintenance of refrigeration, beer taps and pipes from cellars, was prevented from taking over a similar service run by Coors.

Around 149,000 outlets in the UK have technical services equipment for draught beer dispense, valued at about £350 million.

The commission said the merger would have increased SDE's share of the UK market to 55-60 per cent, leading to less competition, a lowering of standards and raising prices of technical services.

"By blocking this merger it is more likely a fully functioning market for technical services equipment and related servicing will develop," said Paul Geroski, chairman of the Complaints Commission.

"This will be good news for both pub companies and their customers."

Independent suppliers of dispensing services were slowly starting to emerge, Mr Geroski added.

But he warned: "Competition is currently limited, in particular, by the brewers' strategy of bundling the provision of the equipment and services in with the price of beer and their ownership and control of this equipment.

"We have suggested the Office of Fair Trading consider whether a market investigation into the pricing or supply of beer may be appropriate."

In a statement Carlsberg said it was "disappointed" with the decision, which it felt would have benefited its customers.

The company added: "We see this as an unnecessary market investigation as we believe existing customers are content with their current arrangements, and the company has been flexible when asked to take an 'unbundled' approach to pricing."