Heineken buys Punch pubs in deal worth £403m


Heineken Glass

Heineken and its partner Patron Capital have struck a deal worth £403 million to buy 3,200 Punch pubs.

Heineken, which also owns the Strongbow and Foster’s brands, is paying £305m to purchase 1,900 pubs, while partner Patron Capital will take on 1,300. But the agreement, which will see Heineken become Britain’s third-largest pub group, hasn’t been welcomed by everyone.

The British Pub Confederation has expressed serious concern at the takeover bid for Punch Taverns and is writing to the Competition Commission asking for the takeover to be scrutinised. It says that the merger raises fears about consumer choice and weakens the position of Punch tenants, who could be pushed out of their pubs so that Heineken can stock its products.

Greg Mulholland, MP and chair of the British Pub Confederation, said: “The idea of one giant tied pubco taking over another is very worrying and it would not be in the interests of consumers or licensees to have Heineken buying Punch. Pubs that are succeeding are those that have the freedom to trade and to buy beer from the breweries whose beers their customers want to drink.

“To have a giant brewing pubco taking on one of the two giant pub owning property companies would be a huge step backwards and could restrict choice for both licensee and customer alike and this must be referred to the Competition Commission. There is also the danger with Heineken wanting pubs to stock their own products that they would be looking to ‘churn’ existing Punch licensees to be able to do so, which would be completely unacceptable”.

Heineken, however, said the move was good news for the pub industry and pub-goers across the UK. David Forde, managing director of Heineken UK, said: “Our proven track record of success demonstrates that well invested and well-run pubs in the leased and tenanted sector can thrive.
“This development is good news for pub-goers across the UK who will see the benefit of better pubs in their communities. We look forward to welcoming new licensees into Star, and to working with them to grow their businesses.”

The pubs acquired by Heineken UK will be operated for six months by Vine Acquisitions under a transitional services agreement, before then being fully integrated into Heineken’s existing Star Pubs & Bars operating arm. Punch shares closed 7.9% higher on Thursday following the announcement.

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