CAMRA urges CMA to investigate Carlsberg and Marston’s joint venture

As previously reported by The Morning Advertiser (MA)​, Marston’s Brewing Business and Carlsberg UK announced their intention to merge​ and create Carlsberg Marston’s Brewing Company in a £780m deal on 22 May.

However, after writing to the CMA in June expressing concern over the potential impact of the joint brewing venture, which will be 60% owned by Carlsberg UK, with Marston’s holding the remaining 40%, CAMRA has again called upon the CMA to investigate the deal.

In an appeal to the competition body’s chief executive, Dr Andrea Coscelli, CAMRA’s chief executive Tom Stainer explained the joint venture could have anti-competitive effects on the UK beer and pub market.

“Since the day that it was announced, CAMRA has raised serious concerns about the proposed Carlsberg Marston’s Brewing Company and choice for beer drinkers, pub goers and over the future of British beers, brands and breweries,” Stainer said. 

“We wrote to the CMA back in June and asked them to investigate. We were surprised to be told it wasn’t a matter for them, and that we should talk to the EU Commission instead. 

“We don’t understand why the CMA does not seem interested in investigating something that will clearly have an impact on choice of beer on the bar in pubs.”

Seemingly disinterested

According to CAMRA’s calculations, the UK beer and pub market is becoming less competitive with global brewers currently holding a 25.25% share of UK pub companies, which CAMRA forecasts will rise to almost 32% if the proposed joint venture is allowed to proceed.

In its latest appeal, CAMRA asks the CMA to trigger what is known as the Article 9 referral procedure - meaning the UK competition body could lead an investigation instead of the EU Commission because the joint venture will mainly impact the UK beer and pub market.   

“The CMA exists to promote competition for the benefit of consumers therefore, it is disappointing that they are seemingly disinterested in investigating something that will have potentially anti-competitive effects on the UK beer and pub market. 

“It is vital the CMA steps up the plate, thoroughly investigates the proposed joint venture between Marston’s and Carlsberg, and helps to ensure there is fair competition, access to market for brewers, and decent consumer choice when it comes to beer and pubs up and down the country.” 

The CMA cast an eye over merger and acquisition activity in the pub sector as recently as October 2019 when it investigated Stonegate’s £1.27bn acquisition​ of Ei Group, which would see the former’s pub estate rise by around 4,000 sites and become the UK’s largest pub operator.

The competition body approved the proposed acquisition in February 2020 after both parties satisfied the watchdog that a package of 42 pubs would be sold​ to avoid potential monopolies.

Enviable portfolio ​

A spokesperson for Carlsberg UK said: “The proposed joint venture between Carlsberg UK and Marston’s Brewing Company brings together two historic brewers to create a better beer business, with complementary beer portfolios and a sustainable future in UK brewing.

"This will add value to beer-drinkers, customers, suppliers and the employees of both brewers. In respect of anti-trust, we are cooperating with the relevant authorities and do not see any concerns arising from the joint venture.”

When asked about the joint venture’s plans for Marston’s existing collection of UK breweries and sub-brands and how Carlsberg Marston’s Brewing Company will promote diversity and consumer choice in Britain’s pubs in May, Carlsberg UK’s CEO Tomasz Blawat, who will head Carlsberg Marston’s Brewing Company as its CEO​, told MA​ that his vision is to combine Carlsberg’s lager credentials with Marston’s cask ale expertise to form “an enviable beer and beverage portfolio”. 

“One of the greatest strengths of the Marston’s business is its portfolio of regional brands that are brewed locally,” Blawat said. “It will remain important to the joint venture that we continue to have a local brewery for consumers of these brands.

“Ultimately, Carlsberg Marston’s Brewing Company will have complementary international, national and regional beers and brands to offer to pubs and beer drinkers.”

Carlsberg brands include Carlsberg Danish Pilsner, Carlsberg Expørt, Poretti, Tetley’s, Somersby cider and the London Fields Brewery craft portfolio, while the Danish beer giant also holds the brand licences in the UK for San Miguel, Mahou and the Brooklyn Brewery craft beer portfolio. 

Marston’s, which operates around 1,350 pubs, produces cask and packaged ales including Hobgoblin, Wainwright, Marston’s Pedigree and 61 Deep, while operating a number of brands under licence with global brand owners such as Estrella Damm, Shipyard, Erdinger, Warsteiner and Kirin.