For the government to allow the formation of the mother of all brewers is, surely, out of the question, even if one accepts the argument that concentration is needed in an industry which is awash with over-capacity at a time of falling demand. Change there almost certainly will have to be. But the form of Courage's dismemberment will be complex and may well involve several other parties.
The financial arrangements S & N will have to put in place seem almost peripheral set against the other issues involved. These include the unravelling of Courage's half share in Inntrepreneur, the 4,350 strong pub chain owned with Grand Metropolitan, and numerous beer production agreements with the likes of Anheuser Busch, Holsten and even Foster's itself. Inntrepreneur, which is tied to Courage for the next three years, is unquestionably the most contentious issue. The pub company is at the centre of the Office of Fair Trading's recently launched investigation into beer supply prices
This is a deal which is clearly going to be of enormous benefit to S&N, and, if it succeeds in reducing capacity, to the industry as a whole. Finding a way to complete it that will also meet regulatory concerns is another matter.