Lobby group demands assurances over Punch Taverns takeover

Real ale lobby group, CAMRA has said it is worried that the takeover of Staffordshire pubco Punch Taverns could lead to reduced competition in the industry and leave beer drinkers short changed.

Heineken and Patron Capital, using newco Vine Acquisitions as a bidding vehicle, have agreed a deal with Burton-upon-Trent-based Punch to acquire the entire and to be issued share capital of the company in a deal which values the business at £402.7m.

Immediately on completion of the deal, Heineken will acquire from Patron a portfolio of around 1,900 Punch pubs with Patron retaining an additional 1,329 which it will run itself.

In an open letter to Lawson Mountstevens, managing director of Heineken’s Star Pubs & Bars, Colin Valentine, CAMRA National Chairman, said drinkers needed assurances the deal would not restrict choice.

In the letter, he writes: “We are concerned that the proposed acquisition could lead to a lessening of competition in the on-trade beer market and therefore a reduction in choice, not only for our members but for the many millions of beer drinkers and pub goers across the country.

“We note that Heineken already has an existing market share of 24% in the on-trade and has a declared policy of restricting the access of competitors to the pubs that they own.

“CAMRA is concerned that the effect of the planned takeover of these Punch Tavern pubs has the potential to be considerably detrimental to the interests of customers. We believe that customers are likely to not only experience reduced choice in the range of cask beer from small and regional breweries in pubs owned by Heineken but also in the wider market, as it becomes harder for new brewers to emerge and for existing brewers to increase the availability of their products.”

He adds: “I’d invite you to reassure myself and CAMRA members, as well as all beer drinkers and pub users across the UK, by giving unqualified assurances that you will ensure that the provision of the kind of choice that currently exists in Punch Taverns pubs will remain a priority for you if your company’s acquisition is successful.”

In particular, he said he wanted assurances that customers would still be able to choose from a range of real ales, ciders and perries; that the company would abide by the letter and the spirit of the Pubs Code including giving tenants the right to opt for a market rent only option; and that it was the group’s intention to continue operating the vast majority of the acquired pubs as going concerns.

“Can you give assurances that you are committed to allowing your licensees flexibility in offering guest real ales from local breweries, which cannot be considered a threat to a company of Heineken’s size,” he added.

The lobby group has also called for a meeting post-acquisition to determine plans for the future.