Scottish & Newcastle told to dispose of 700 pubs

THE GOVERNMENT last night sought to influence Scottish & Newcastle's forthcoming pub-disposal programme, threatening to refer the brewer's recent pounds 1.14bn deal with Greenalls to the Competition Commission unless its concerns were addressed.

Kim Howells, the Competition and Consumer Affairs minister, said bringing together S&N's 2,650 pub estate with Greenalls' 821 pubs would give S&N more than a quarter of the outlets in seven local districts.

To comply with the "beer orders", S&N must dispose of 600-700 outlets and officials at the Department of Trade and Industry said the brewer should ensure sales in the seven, unnamed areas were included. S&N said it was happy to meet the directive.

Mr Howells said he wanted S&N to agree to reduce its pub holdings below 25 per cent in the areas within six months of the completion of the Greenalls deal.

A spokesman for S&N said: "We are delighted to give an undertaking, which allows us to refine our deal slightly."

Shares in S&N ended 2p lower at 556p, while Greenalls slipped 3p to 296p.

Under the long-expected deal, announced in September, S&N bought the Greenalls outlets to expand the geographical reach of its business across the country.