EU refers beer merger decision

Interbrew is set to dominate the UK beer market.

The European Commission has decided to refer part of Belgian brewer Interbrew's acquisition of Bass to UK regulators.

The referral only affects the parts of the £2.3bn ($3.4bn) deal relating to the UK beer sector, it said.

The UK Secretary of State for Trade & Industry, Stephen Byers, welcomed the commission's decision, saying the proposed deal warranted further investigation.

The Office of Fair Trading will now have four months to decide whether to allow Interbrew to hold on to a position giving it about one third of the UK beer market.

Interbrew will also hold supply agreements with about one quarter of the UK's pubs.

Beer market ruling

Analysts speculated that UK regulators would force the Belgian brewer to dispose of some brands, leaving it with a market share of no more than 30%.

Some analysts said buyers could be difficult to find in light of recent consolidation in the UK beer sector.

Earlier this year, Interbrew itself removed one possible contender from the market, buying Whitbread's beer business for £400m.

Elements relating to supply of beer outside the UK and flavoured alcoholic drinks in the UK and elsewhere were cleared as competition concerns did not arise in these areas, the commission said.