Bass finds brewers merger hard to swallow

Date: 30/10/1997

“This is very much a test case for the competition authority,” said British brewer Bass, referring to the proposed merger between Czech brewers Prazdroj and Radegast.

Bass, part of a consortium which is the third-biggest brewer on the Czech domestic market, has complained to local competition authorities that the tie-up will create a dominant player with an immediate 41&percent; share of Czech consumption, which could rapidly rise to around 60&percent; as it begins to flex its muscles.

“It will reduce choice and lead to higher prices than would be the case in a more competitive environment,” said Bass, which insists the argument that a strong company is needed to attack export markets should not be swallowed. Bass also alleges that fair share-dealing rules were broken, with shareholders unable to vote on the merger engineered by Japanese bank Nomura. Bass has a 33&percent; share stake in Radegast.

The Czech competition authority was given top marks by the Commission in its opinions (avis) on the applicant countries' technical readiness for EU membership, with officials citing it as a model for others to follow.

Now, however, Commission competition experts and MEPs are watching attentively to see whether the Brno-based authority will justity that reputation in its handling of this case.