OFT urged to look into beer price and supply
by Ewan Turney
The Competitions Commission (CC) has suggested that the Office of Fair Trading should investigate the price and supply of beer after blocking Coors' plans to merge its technical operations with rival brewers Carlsberg UK and Scottish Courage.
Coors had originally agreed to join independent Serviced Dispense Equipment Ltd (SDEL) for 10 years in August last year, claiming it would be a more "licensee friendly" method be-cause it would limit the number of different technical teams arriving at pubs to service taps and dispense systems.
However, the CC confirmed its provisional assessment of January that the move is "anti-competitive" because it would have given SDEL between a 55% and 60% share of the technical-services equipment market. The CC claimed this "would be likely to lower standards and raise prices" of technical services.
Chairman of the CC Paul Geroski said: "This will be good news for both pub companies and their customers.
"Independent suppliers of these services are slowly starting to emerge but 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."
Coors, which had planned to transfer its 320-strong custo-mer technical services team to Innserve, responsible for the day-to-day running of SDEL, said it was "extremely disappointed" with the outcome and is considering "a number of potential options" for its technical department.
However, the company refuted the CC's claims that retailers were unable to get the best deal because of brewers bundling technical services into the price of beer.
The company would not comment on what proportion of the cost of a pint was attributed to technical services but a spokeswoman said: "It is purely customer demand. They prefer to buy a package as it is easier for them."
She added: "We told the CC that by outsourcing our technical services we would take costs out of the business and would pass those savings on to retailers."
Innserve joint owner Mike Foster said it would be "business as usual" for them as the systems for Carlsberg and ScotCo operations went live last weekend.
