MMC in firing line over Bass probe

The Monopolies and Mergers Commission has been hit by a row over a senior member of its high-level team investigating brewer Bass's pounds 200m takeover of rival Carlsberg-Tetley.

Sir Archibald Forster, one of four commissioners vetting the deal, is a non-executive director of Midland Bank, as is Tony Hales, the chief executive of Allied Domecq which sold one half of Carlsberg-Tetley.

Midland Bank holds board meetings every month, and both Sir Archibald and Mr Hales attend on a regular basis.

News of the working relationship between the two men has raised eyebrows in the City and among industry figures, some of whom say Sir Archibald should stand down from the investigation in view of the links.

"It's a complete conflict of interest. What it shows more than anything else is the utter chaos of the MMC," said Tim Martin, chief executive of Wetherspoons, the free house chain.

"If it were a jury case he would be deselected," said one leading City brewing analyst.

The MMC has been in the industry's firing line since 1988, when its recommendations - now enshrined in the Government's Beer Orders - caused more concentration among brewers, not less.

If allowed, the Carlsberg-Tetley deal will give Bass 35 per cent of the market, catapulting it back to the top slot it lost when Scottish & Newcastle took over Courage.

This weekend the attacks were rebutted by Allied Domecq and the MMC.

"Tony Hales and Sir Archibald have never discussed the bid. We have never doubted the MMC's impartiality. The people who serve on these committees are honourable," an Allied Domecq spokesman said.

"We have extremely stringent procedures for dealing with actual or potential conflicts of interest. I do not believe that this would constitute a conflict of interest," an MMC spokesman said.

However, he added: "I acknowledge that it does come down to a matter of judgement. When they are at Midland Bank, one imagines they are talking about matters relating to Midland Bank."

The removal of Sir Archibald, a former chairman of Esso UK, could seriously delay the publication of the MMC's findings, which are scheduled to be announced late next month.

Industry figures this weekend, however, called for a replacement. "Given the climate of sleaze in the country generally and the need for everything to be completely above board, it would make sense for Sir Archibald to excuse himself," one brewery director said.

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