The fact that the conditions attached to the takeover all relate to the vertical integration of brewers and their outlets - the pubs that sell the beers - confirms that the Government is unconcerned about horizontal integration between those who make the product. Consolidation is inevitable, a view that will be reinforced by the way the Department of Trade and Industry itself decided to make the OFT go back and produce the framework for a conditional clearance, when the competition authority's first inclination was a monopolies reference. This is a DTI that still believes, under Ian Lang, in Michael Heseltine's philosophy that industrial competitiveness should take priority over competition.
The absence of OFT restrictions on brand ownership as well as brewing capacity will only increase the incentive for others to move fast and consolidate their positions. The first push could come from Bass, and its victims are likely to be among smaller competitors with the strongest brands, especially those with a degree of national recognition. That means respected names such as Greene King, the East Anglian brewer, and perhaps also Marston, must already be under scrutiny.Reuse content