Carlsberg and Marston’s joint venture delayed due to investigation

The UK’s competition watchdog has opened an investigation into a joint venture between Carlsberg and Marston’s that will bring brands such as Pedigree, Hobgoblin and Carlsberg’s pilsner under one roof.

The Competition and Markets Authority has launched a probe into the deal to find out whether it would create a relevant merger situation and damage competition.

The two brewers announced their joint venture plans in May this year in an effort to cut costs as the UK emerges from lockdown. Called Carlsberg Marston’s Brewing Company, it will have control of Carlsberg UK’s Northampton brewery, London Fields brewery, and national distribution centre; and Marston’s six national and regional breweries – Marston’s, Banks’s, Wychwood, Jennings, Ringwood and Eagle – along with 11 distribution depots. The deal is estimated to be worth £780 million.

The danish brewer is the majority shareholder in the business, with a 60% stake, but it will value Marston’s brewing division at up to £580m.

Members of the brewing sector are being asked to submit comments on the transaction to the CMA to help with their decision. Interested parties have until 2 September to do so.

The deal was meant to close in September, but the CMA’s investigation has pushed the deadline back by four weeks.

Some industry leaders in the UK’s brewing sector opposed the deal when it was announced, with the Campaign for Real Ale (CAMRA) lobbying for a CMA investigation last month.

Tom Stainer, CAMRA’s chief executive, said the group has “serious concerns” about the joint venture, including market foreclosure for small brewers, which he said will reduce choice for beer drinkers and pub-goers.

“This is why the CMA must make sure that any merger does not stifle fair competition, access to market for brewers, and ensure decent consumer choice of beer in pubs up and down the country.”