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Tuesday, 18 September, 2001, 17:34 GMT 18:34 UK
Interbrew ordered to sell Carling
Man and woman drinking Bass Ale
Bass: Most of the division must be sold
A six-month battle by Interbrew to hold on to its 2.3bn Bass brewery business has ended with the Belgium-based giant winning only minor concessions.

The UK government, which had an earlier ruling on the merger quashed by the High Court in May, has offered Interbrew the alternative of selling the Carling Brewers division.

The sale of Carling Brewers, including the popular Carling lager brand, would leave Interbrew with an estimated 16% of the UK market.

The government opened its investigation into the buyout of Bass Brewers over concerns that it gave Interbrew a 32% market share.

Heineken lines up

Trade & Industry Secretary Patricia Hewitt on Tuesday gave Interbrew until the end of February to sell either the complete Bass Brewers business, or the Carling Brewers unit.

[If Carling is sold] we would want to see it bought by a reputable international brewer and not a venture capitalist

Brian Revell, national officer TGWU

"I have today asked the director general of fair trading to seek suitable undertakings from Interbrew to affect the disposals," she said.

The sale of Carling would allow Interbrew to retain Bass operations in Scotland and Northern Ireland.

Interbrew said the government's decision was "good news" as it allowed the company to retain "an important part" of Bass Brewers and strengthen its market presence.

It said it would sell off Carling as soon as possible.

Dutch brewer Heineken is widely viewed as the most likely buyer.

Interbrew shares close up 5.8% 26.98 euros on Tuesday.

Unions concerned

Union officials were less upbeat, concerned that job losses might be on the horizon.

"We have always wanted a solution which would keep Bass Brewers together," said Brian Revell, national officer of the Transport & General Workers Union.

"[If Carling is sold] we would want to see it bought by a reputable international brewer and not a venture capitalist.

"After 10 years of rationalisation in brewing, which has seen over 40 UK breweries closed down, now is the time for stability."

Takeover spree

Interbrew, owner of brands including Stella Artois and Becks, bought the Bass brewing operations last summer as Bass proceeded with its transformation into a hotels firm.

But the addition of Bass brands such as Caffrey's and Tennents to a portfolio already swelled by the purchase of Whitbread's brewery business earlier in the year raised widespread competition concerns.

Following a probe by trade watchdogs at the Competition Commission, the government in January this year ordered the disposal of Bass Brewers.

While Interbrew in May won a reprieve, when the High Court ordered the case to be reconsidered, the ruling was based around a lack of government consultation, rather than the sale order itself.

The Office of Fair Trading in July opened consultation on remedies aimed at reducing Interbrew's share of the UK beer market.

Profits surge

Interbrew two weeks ago reported a 63.9% rise in net profits for the first half of this year to 200m euros (123m; $178m).

The increase, which included profits from Bass, came following a 68.5% rise in revenues to 3.48bn euros.

Excluding Bass takings, the rise in revenues came in at 34.8%.

Interbrew also owns the Whitbread Brewing Company in the UK, as well as several Belgian beers, including Hoegaarden and Leffe.

Since selling its brewing arm, Bass has renamed itself Six Continents.

See also:

05 Sep 01 | Business
Bass Interbrew decision expected
04 Jul 01 | Business
Interbrew given Bass options
08 Jun 01 | Business
UK's new trade and industry minister
03 Jul 01 | Business
Scottish & Newcastle hit by charges
31 May 01 | Business
SAB eyes Bass Brewers
03 Dec 00 | Business
Byers 'to force Carling sale'
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