P.M. BRIEFING : EC Approves Beer Agreement
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BRUSSELS — The European Commission today cleared a proposed asset swap between Grand Metropolitan PLC and Courage, the brewing arm of the Elders empire, after the companies agreed to an adjustment in the deal.
Under terms of the swap, Courage will buy all Grand Met’s breweries, in return for which the companies will form a 50-50 joint venture that will manage pubs tied to the two companies.
The commission said that the sale and the new pub management venture do not infringe European Community competition rules but that an exclusive 10-year supply agreement between Courage and the joint venture does.
After consultations with the two companies, the commission said Courage could have only a five-year exclusive agreement to supply beer to the venture, which is called IEL.
It said that in the following five years IEL would have to buy diminishing quantities of beer from Courage.
This, the Commission said, would give the landlords of pubs tied to IEL the chance to buy beers apart from those brewed by Courage.
Elders and Courage agreed on the deal last year. In November the British government gave its approval, and the companies began talking with the EC.
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