Journalism of Courage
British fair trade watchdog OFT on Monday said Diageos acquisition of United Spirits is against competition and may lead to higher whisky prices in the UK.
The Office of Fair Trading (OFT) will have a fresh look at the deal in the wake of a new proposal made by the companies to sell bulk of Whyte & Mackay business of the Indian liquor major to address the competition issues in the British whisky market.
Diageo Plc and United Spirits Ltd are both major suppliers of spirits worldwide.
In the UK,United Spirits subsidiary,Whyte & Mackay,is primarily active in the supply of whisky,besides being a player in other spirits,including vodka.
The regulator said the merger may lead to a substantial lessening of competition in the supply of blended whisky to retailers.
OFT came to the conclusion after analysing evidence including data on consumer switching between brands,economic modelling and internal documents.
Chris Walters,OFTs Chief Economist and Decision Maker in this case,said the two companies are leading suppliers of blended bottled whisky in the UK,especially to supermarkets and other large retailers. Our investigation considered a wide range of evidence and we concluded that the likely loss of competition could give rise to higher prices for retailers,and ultimately consumers, he said.
Diageo has offered to sell most of its Whyte & Mackay business to address competition concerns.
