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The BBC's Patrick Bartlett
"If it (Interbrew) had lost the case, Bass was expected to be put on the market more or less immediately"
 real 56k

Wednesday, 23 May, 2001, 18:07 GMT 19:07 UK
Court joy for Interbrew
UK Trade & Industry Secretary Stephen Byers, who blocked Interbrew's takeover of Bass
The court disagreed with the government's ruling
The UK's High Court has backed the appeal of Belgian brewer Interbrew against a government ruling that it must sell its recently acquired Bass brewing business because of competition concerns.

Judge Alan Moses said he had concluded that the procedure by which the Competition Commission reached its ruling was "unfair".

Interbrew had not had sufficient opportunity to comment on one important aspect of the case, he said.

Interbrew, the world's second largest brewer, best known as the maker of Stella Artois beer, bought Bass Brewers last August for 2.3bn ($3.3bn).

But the government in January ordered Interbrew to sell Bass because of competition concerns.

Higher prices?

With Bass, Interbrew controlled more than 30% of the UK beer market - a factor the government viewed as likely to reduce choice and lead to higher prices for consumers.

Bass's brands include Carling - the UK's biggest selling beer - Worthington and Caffrey's.

The court said it would resume its hearing on Friday to decide what steps to take next.

Its options include overturning the government's ruling or requiring the Competition Commission to review parts of its ruling.

Interbrew, in a statement on Wednesday, said it looked forward to reaching a "fair and speedy" resolution to the dispute.

For the Competition Commission, chairman Dr Derek Morris noted that the High Court's concerns were limited to a procedural matter.

"I am pleased that Mr Justice Moses supported the commission's report on all matters of substance, and on all but one point," Dr Morris said.

No successful appeals

So far, no decision on a merger by a British minister has been overturned in the courts.

Eleven previous appeals in merger cases have all failed.

Lawyers said Interbrew's appeal focused on whether the ruling was "reasonable" and proportionate to the perceived narrowing of competition.

Interbrew had said the ruling defied logic and was clearly disproportionate to the competition issues at stake.

Jobs might also have been a factor in the government's decision to block the takeover, as the deal was expected to lead to the closure of a number of UK breweries.

Potential buyers of Bass were reported to include Japanese investment bank Nomura - the UK's biggest pub landlord - Carlsberg-Tetley - the UK's number three brewer - and Dutch brewing giant Heineken.

Interbrew, in Wednesday's statement, said it remained "committed to the UK, its customers, consumers and stakeholders in the UK beer market".

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See also:

14 Mar 01 | Business
Interbrew losses after Bass charge
21 Feb 01 | Business
Belgium to sue UK over spilt beer
26 Jan 01 | Business
Interbrew challenges Bass ruling
05 Jan 01 | Business
Belgians bitter at Interbrew snub
03 Jan 01 | Business
Bass takeover blocked
03 Jan 01 | Business
What now for Bass beer brands?
01 Dec 00 | Business
Interbrew shares rise on debut
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