Outlook: Interbrew Wriggles, but Will It Make a Difference?

Article excerpt

know when to give up, do they? Interbrew must have paid out a king's ransom and more in legal, investment banking and lobbying fees attempting to persuade the powers that be that it should be allowed to hang on to the best part of Bass and Whitbread - Goldman Sachs is the latest big gun to be enjoined in the attempt - and finally yesterday it looked as though it might be making headway.

The consultation document published by the Office of Fair Trading certainly had the whiff of compromise about it, with a couple of new, rather less oppressive remedies added to the two originally examined in the Competition Commission report. The big question: is this just the OFT bending over backwards to be scrupulously fair in its re-examination of the case after the caning the Competition Commission received for unfair procedure? Or does it represent a real glimmer of hope for Interbrew?

Unfortunately for the Belgian brewer, it is more likely to be the former than the latter. Having now explained to the competition authorities how a disposal of Whitbread might be accomplished with the Stella Artois brand sufficiently ring fenced to prevent Interbrew interfering - the issue on which the Competition Commission fell down - Interbrew has decided it doesn't want to do it anyway. Too much money and time has already been invested in integrating Whitbread, and in any case, the Stella Artois brand is so central to the Interbrew strategy that it cannot be abandoned.

On the other hand, re-opening the case has allowed a tactical retreat for Interbrew that opens up alternative remedies. Interbrew told the Competition Commission that breaking up Bass or Whitbread was too complicated and therefore out of the question. …