A Punch in the face: The CMA opens its investigation into Heineken's Punch Taverns takeover

 
Courtney Goldsmith
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Punch landlords have expressed concerns the takeover deal would reduce choice for customers (Source: Getty)

The Competition and Markets Authority (CMA) has opened an initial investigation into Heineken's £403m deal to snap up British pub operator Punch Taverns.

The UK watchdog will consider whether the deal would reduce competition and choice for customers and whether it needs to launch an in-depth investigation into the takeover. The deadline for the decision is 24 April.

Pub landlords have criticised the takeover for this very reason. The Punch Tenant Network, an independent group that represents Punch's publicans, fears Heineken's limited number of own-brand products, which include Foster's lager and Strongbow cider, will dash out any pub individuality.

"Heineken is a global brewer, with very different priorities to their customers who often rely on hard earned local relationships to make their businesses work," said Paul Waterson, chief executive of the Scottish Licensed Trade Association, another group critical of the deal.

The Dutch brewing giant has responded to concerns, saying it intends to work on a case-by-case basis with pubs while working with the Society of Independent Brewers (SIBA) to ensure tenants continue to have access to a wide range of quality beers.

"We want to work constructively with licensees to grow our businesses together, and we have no intention of imposing blanket conditions on them which are detrimental to that shared aim," said a Heineken spokesperson.

"We will start with what is right for each of the pubs joining us and we will work together with licensees to ensure they have the right drinks on offer to suit the specific needs of each pub."

Heineken said it will be "fully cooperating" with the CMA. "This morning’s announcement confirms an important and fully expected stage in the process to finalise our acquisition."

A Punch spokesperson said the board of Punch expects the transaction to complete as anticipated.

Punch shareholders voted to approve the takeover bid of 180p-per-share last week.

Heineken reported yesterday its net profit fell more than 18 per cent, but its shares rose on plans to target margin growth after improvements in 2016.

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