Marston's and Carlsberg brewing merger may be investigated by competition watchdog

The Competition and Markets Authority said it would establish whether the deal announced in June could reduce competition in the UK, although it emphasised that no decision has been made.

The Campaign for Real Ale has called for an investigation of the merger saying it would reduce the choice of beers available to pubgoers.

The move makes attempts by Carlsberg and Marston's to seal the deal by the end of September – initially slated as a hopeful competition date – unlikely.

CMA officials said in a statement: "The Competition and Markets Authority is considering whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services."

Interested parties are invited to submit their views to the agency by September 2.

If the deal is not held up, the two companies hope to create the Carlsberg Marston's Brewing Company, which would have its headquarters in Wolverhampton, with Marston's brewing business valued at £580m and Carlsberg's UK brewing division at £200m.

Marston's said it will own a 40 per cent stake in the joint venture and will use the plans to focus on its pub and accommodation business.

The companies said talks started towards the end of 2019, and they hope to seal the deal in the third quarter of 2020.

Historic company

Parts of Marston's have been brewing in the Midlands for nearly 200 years and Banks's beers are still brewed at the 145-year-old Park Brewery in Chapel Ash, Wolverhampton.

The company, which employs about 14,000 and has an estate of around 1,350 pubs nationally, was Wolverhampton and Dudley Breweries before changing its name with the acquisition of Burton upon Trent-based Marston's in 1999.

Ralph Findlay, chief executive of Marston's, said in June that the deal was "sign of confidence" in the long-term future of the UK brewing sector.

He said: "It's clearly a very difficult time right now for brewery and pub operators.

"We know that things will remain uncertain over the next few months, but we are confident that this strengthens our position in the long term."

Tomasz Blawat, managing director of Carlsberg UK, said at the time that the "strong heritage" of both firms made the venture logical.

He said: "I believe in having a strong balance of international brands and local brands. The deal complements this perfectly.

"I wish this was all happening in a different set of circumstances but things have substantially changed since we first had conversations last year.

"We were well into discussions when the coronavirus crisis kicked in and we were left facing the choice of whether to continue, but we have a very long-term view."