Bass in talks to buy Allied's stake in Carlsberg Tetley

Bass is locked in talks to buy Allied Domecq's interest in Carlsberg Tetley - the joint brewing venture set up three years ago between Allied and Carlsberg of Denmark.

A deal would give Bass control of the Tetley brand and return it to pole position in the UK brewing league, a position it lost last year when Scottish & Newcastle bought Courage.

Tentative talks between Bass and Allied began before Christmas but more concrete discussions have now started to take place. Although the negotiations are fraught with difficulty, Bass is still keen to strike a deal and gain control of the Tetley bitter brand - one of the top two selling beers in the UK.

Bass's initiative is part of what industry analysts believe is an "inevitable consolidation" in the industry to deal with an over-supply problem. Brewers can now produce five pints for every four they can sell.

The takeover would almost certainly make Bass, led by chairman and chief executive Sir Ian Prosser, the biggest brewer in the UK once more. It would also deal a sharp blow to Whitbread, the country's fourth largest beer producer. Whitbread has also been trying to court Carlsberg Tetley, which analysts reckon is worth up to pounds 500m, and also lost out in the race to buy Courage.

Both Bass and Allied Domecq yesterday stood rigidly behind a "no comment" policy when questioned about the talks, and the possibility that a deal may be consummated before the summer. However, an industry source said: "The two sides have been in discussions for some time, and they have recently achieved some considerable progress."

It is also understood that the Office of Fair Trading and the mergers and acquisitions advisory unit at the Department of Trade and Industry have been consulted. Any move by Bass would undoubtedly result in tough concessions, such as selling some breweries or pubs, to obtain the necessary regulatory approval.

Combined market shares of Bass and Carlsberg Tetley would be close to 40 per cent, a figure which would make even this lenient Government on takeovers and mergers balk at the prospect of allowing such a giant to be created. Bass has around 23 per cent and Carlsberg Tetley about 16 per cent of the UK market, compared to S&N's 30 per cent.

Moreover, there is a big geographical overlap between the two companies - principally in the Midlands and Yorkshire, where their combined market shares exceed 70 per cent in many areas. Bass has eight breweries and Carlsberg Tetley five; both have large sites in Burton-on-Trent.

One analyst said yesterday that the overlaps would lead to far bigger cost savings than those that resulted from S&N's purchase of Courage. Besides the Burton breweries, Bass and Allied also own sites close to each other in the North and Midlands. Bass has breweries in Birmingham and Sheffield, while Allied has sites in Leeds and Northampton.

The industry source said that any moves by Bass to strip out costs through closing breweries could cause alarm for the Government as the clock ticks away to the general election. "Time is not on Bass's side," he added.

The negotiations are also complicated because of the overlap in brands - particularly Carlsberg lager and Bass's Carling Black Label.

Carlsberg, the Danish company that teamed up with Allied, earns around 30 per cent of its profits from the UK and, according to sources, is adamant that it will ring-fence its trading position before giving its sanction to any deal.

Comment, page 17.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18000 per annum: Recruitment Genius: A position has arisen within th...

Ashdown Group: Development Manager - Rickmansworth - £55k +15% bonus

£50000 - £63000 per annum + excellent benefits : Ashdown Group: IT Manager / D...

Recruitment Genius: Security Officer

£16500 per annum: Recruitment Genius: Applicants must hold a valid SIA Door Su...

Ashdown Group: Business Analyst - City, London

£50000 per annum: Ashdown Group: Business Analyst - Financial Services - The C...

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss