Hewitt orders Interbrew to break up Bass brewing assets

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The Independent Online

Interbrew was yesterday forced to put its Carling lager business, maker of Britain's best-selling beer, up for sale after the Government ordered the break-up of the Bass Brewers assets bought last year by the Belgian group.

The company has set itself a December deadline for selling Carling and is poised to finalise a list of bidders.

Patricia Hewitt, Secretary of State for Trade and Industry, gave Interbrew the option of either selling Bass Brewers in its entirety or just the Carling brand. She said the company could keep its Scottish and Northern Irish businesses and the Tennent's, Boddingtons and Bass ale beer brands.

The long-awaited ruling, which has tantalised the brewing industry for months, comes after the Government blocked Interbrew's takeover ofBass and Whitbread's brewing business in January on anti-competitive grounds.

Hugo Powell, Interbrew's chief executive, had the decision overturned in May in the High Court on a technicality, but the deal was sent back to the Office of Fair Trading for a re-think.

Ms Hewitt's decision was in accordance with advice from the Director General of Fair Trading, John Vickers, on how best to trim Interbrew's 32 per cent share of the British market.

Mr Powell said: "We are pleased with the decision, which clears the way for us to strengthen our UK platform as well as our international brand portfolio. We will work with the regulators to conclude matters as soon as practicable."

The Carling solution, which had been well flagged by industry sources, will position Interbrew as the third-biggest brewer in Britain, with a 16 per cent market share. Scottish & Newcastle will head the pack at 26 per cent, followed by Carling Brewers with 19 per cent.

An Interbrew spokesman said the decision left it with "a nice brand portfolio and a lot of organic growth potential".

Heineken, the Danish brewer, is the favourite to buy the Carling brand, which is expected to fetch about £1.2bn. At the moment, Heineken is brewed in the UK under licence by Whitbread, now part of Interbrew, but the contract is expected to come up for renegotiation.

The other possible bidder, South African Breweries, said it would prefer to buy the whole of Bass Brewers, rather than just Carling. But industry sources said Interbrew may yet have to sell the whole of Bass if it cannot get a fair price for Carling. The Belgian brewer of Stella Artois pipped Heineken and SAB to buying Bass, paying a hefty £2.3bn.

Analysts saw the decision as compromise, allowing both sides to emerge with their pride intact. Stuart Price, an analyst at WestLB Panmure, said: "It was politically expedient."

Ms Hewitt ruled that Interbrew had until the end of next February to complete the sale.