United Kingdom, London: Britain's competition watchdog said on Wednesday, 05 January 2005, a deal by two top UK brewers to buy equipment from rival Adolph Coors Co to dispense draught beer to pubs could increase their market power unfairly, according to Reuters. Scottish & Newcastle Plc, Britain's largest brewer, and Denmark's Carlsberg combined their operations to provide equipment to British pubs to dispense draught beer last year in a deal combining assets worth around 115 million pounds ($221 million).
They formed a new company, Serviced Dispense Equipment Limited (SDEL), to own this part of their business, which agreed in August to buy Coors' UK pub dispensing equipment and provide maintenance for Coors in Britain.
But the Competition Commission said on Wednesday the increase in SDEL's market power resulting from the addition of the Coors business would be likely to lead to less competition in the market for the dispensation of beer. "This can be expected to have adverse effects in quality and price," the chairman of the Competition Commission, Paul Geroski, said in a statement.
The Commission now invites responses from the main parties and other interested parties on these provisional findings and on possible remedies by Jan. 25.
There are currently around 149,000 outlets supplying draught beer in Britain, the majority of which require services provided by SDEL such as coolers and lines running from the cellar to the bar, the regulator said.
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