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Northern Ireland's pubs watch on as £68bn merger looks set to go ahead

By John Mulgrew

Published 14/10/2015

A merger of the two firms would bring together the world's biggest beer groups, with AB InBev potentially adding SABMiller's Peroni and Grolsch brands to its own stable of more than 200 beers
A merger of the two firms would bring together the world's biggest beer groups, with AB InBev potentially adding SABMiller's Peroni and Grolsch brands to its own stable of more than 200 beers

Northern Ireland's pub industry has reacted with caution as the world's biggest beer deal between SABMiller and AB InBev looks set to go ahead for £68bn.

The firms have "agreed in principle" on the multi-billion pound blockbuster tie-up to create the world's biggest drinks firm.

And it has already raised eyebrows in the drinks industry, with concerns of a monopoly now that the two are combining.

A merger of the two firms would bring together the world's biggest beer groups, with AB InBev potentially adding SABMiller's Peroni and Grolsch brands to its own stable of more than 200 beers, including Corona and Stella Artois, Beck's, Leffe and Hoegaarden.

Michael Stewart, a director of The Hudson bar in Belfast, said it "could go one of two ways".

"The interesting thing is, no one knows. There will be three massive brewing companies. It will be Carlsberg, Heineken and them.

"Does that mean it becomes a cartel of pricing?

"Our problem in Northern Ireland is, we are snookered anyway. We pay more for our keg beer than Great Britain. If it helps bring the price down, and increase range, then it would be welcomed."

He said pubs will keep a keen eye on whether products, support, marketing, and prices are affected by the deal.

"And there are so many other parameters that are having a massive impact on the industry," he said.

Gerry White, manager of the John Hewitt in Belfast, said the deal could have less of an impact on Northern Ireland, than elsewhere in Europe.

Other big producers and distributors have a larger presence in pubs here, including Guinness owner Diageo and Tennent's.

"It's hard to say what impact it could have when it's that big. The only concern is if some of the smaller brands lose their identity, that would be an issue.

"That would be the main worry, simply because brands may be cut to make the business more streamline, and cut costs.

"It could have less impact here than what it would in Europe as a whole, where we are a bit more self-contained, and craft beer here is growing immensely."

Peroni and Grolsch group SABMiller tentatively reached a deal over a sweetened £44-a-share offer from its Belgium-based rival in what will be the largest takeover of a British firm in corporate history. AB InBev and SABMiller still have to agree the terms of a formal offer, but have extended the deadline to make a firm bid under City takeover rules to October 28.

Matthew Dick of Boundary Brewing in east Belfast said the deal "would not benefit the consumer".

He added: "It goes back to the consumer again. It will be bad for them, it won't benefit them, and it's unlikely to get cheaper," he said.

"And it won't increase range. There's probably a chance some of the beers could be taken off.

"It also comes back to choice. When the economies of scale go up, the price doesn't tend to come down."

Darren Nugent, of Co Tyrone's Pokertree Brewing Company, had already raised concerns over the impact a monopoly could have on the industry.

"They have a huge competitive advantage, but I don't know how much this will impact here - the stranglehold couldn't get much stronger and there is an element of anti-competitiveness."

And Colin Neill, chief executive of Hospitality Ulster, had raised concerns that the merging of the firms could see a reduction in selection and brands at pubs.

Belfast Telegraph

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