Decision Nº M/08/011 from Competition and Consumer Protection Commission, 2008-10-03

• Jurisdiction: Ireland
• Parties: Scottish & Newcastle,Heineken
• Date: 03 October 2008
• Decision Date: 03 October 2008
• Status: Cleared (Phase 1)
• Court: Competition and Consumer Protection Commission (Ireland)
• Decision Number: M/08/011

DETERMINATION IN MERGER NOTIFICATION M/08/011 –

HEINEKEN/SCOTTISH & NEWCASTLE____________________________

Section 22 of the Competition Act 2002

Proposed acquisition by Heineken N.V. of t he assets relating to the business

operated by S&N in Ireland, namely, Beamish & Crawford plc

Dated: 03/10/2008______________________________________________

M/08/011 – Heineken/Scottish & Newcastle 1

CONTENTS

SECTION ONE: INTRODUCTION....................................... 1

Introduction.................................................................... 1

Background..................................................................... 1

The Transaction .............................................................. 3

The Undertakings Involved ............................................. 3

Rationale for the Notified Transaction ............................ 3

Phase 1: Preliminary Investigation ................................. 3

Phase 2: Full Investigation ............................................. 6

SECTION TWO: BACKGROUND ....................................... 11

Introduction.................................................................. 11

Key Features of the Irish Beer Market........................... 11

Activities of the parties in the Irish beer market........... 13

The activities of the parties’ main competitors in the

State ............................................................................. 16

SECTION THREE: RELEVANT PRODUCT AND GEOGRAPHIC

MARKETS ...................................................................... 20

Introduction.................................................................. 20

Relevant Product Market............................................... 20

Relevant Geographic Market ......................................... 38

SECTION FOUR: MARKET STRUCTURE ........................... 40

Introduction.................................................................. 40

Measuring Concentration .............................................. 40

Market Structure for the National Lager Markets .......... 41

Market Structure for the National Stout Markets........... 42

SECTION FIVE: COMPETITIVE ANALYSIS - LAGER ......... 45

Introduction.................................................................. 45

The Counterfactual........................................................ 45

National Off-trade Lager Market - Market conditions .... 47

Substantial Lessening of Competition in Off-trade Lager

..................................................................................... 59

Authority’s Conclusion: Off-trade Lager Market ............ 64

National On-trade Lager Market- Market Conditions ..... 65

Substantial Lessening of Competition in On-trade Lager80

M/08/011 – Heineken/Scottish & Newcastle 2

The Competition Authority’s Conclusion: Off-trade Lager

Market .......................................................................... 91

SECTION SIX: COMPETITIVE ANALYSIS - STOUT .......... 92

Introduction.................................................................. 92

Competitive Assessment ............................................... 93

Substantial Lessening of Competition in On-trade Stout

................................................................................... 104

The Competition Authority’s Conclusion: On-trade Stout

Market ........................................................................ 110

SECTION SEVEN: DETERMINATION ............................. 111

Determination ............................................................. 111