Guinness has four weeks to present a case for its proposed buyout of United Beverages Holdings (UBH) after the Competition Authority stated its intention to block the move by withholding a certificate on the share purchase agreement. The authority, whose role is to maintain competitiveness in the marketplace, is believed to have differed with Guinness over the definition of the soft drinks and beer distribution business in finalising its Statement of Objections this week.
According to one source, the authority has decided there are two distinct areas involved: the soft drinks production market and the packaged beer and soft drinks distribution market. It disagreed with Guinness that there was one market covering alcoholic and non-alcoholic drinks, a definition which would mean there were a larger number of competitors and strengthen the company's case.
A spokesman for Guinness said that the Statement of Objections was being reviewed. Last June, Guinness announced its £33 million plan to acquire the remaining 70 per cent of UBH owned by Fyffes, James Crean, and the Byrne and Corcoran families and filed its application to the Competition Authority in September. The spokesman said there was a 28-day period in which Guinness could reply to the statement and seek an oral hearing. an O Cuinneagain, assistant principal at the Competition Authority, said that an assessement by the authority on the buyout would not be made until it made its final decision.
"The parties might come back and say they will do a,b and c or else they will argue against the authority's concerns, and then the authority goes away and makes a final decision," he said.
He added that Third parties have three weeks in which to make submissions, either arguing for or against the buyout.
The spokesman for Guinness added that the issue was unrelated to the European Commission and Guinness's agreement that the company would dispose of minority shareholding interests in the spirits distribution business within 15 months as a condition of the merger with Grand Met.
