The Office of Fair Trading (OFT), the UK competition regulator, is to carry out a consultation process ‘invitation to comment’ to ascertain that the deal between Diageo and United Spirits does not violate any competition rules and to find out the impact of deal on spirits market.
The consultation process, which will run till 2 August 2013, will be applied to all the mergers involving companies in the UK.
The focus of the consultation process will be likely on United Spirits' Whyte & Mackay business with brands like Jura, Vladivar and Dalmore. The OFT will check whether Whyte & Mackay's own-label whiskey production will be placed under the same category as Diageo's Bell's whiskey brand.
The OFT will also review the negative impact of the combined company on the spirits market, and will refer to the Competition Commission of India for searching possible solutions.
The OFT said, "The Office of Fair Trading is considering whether this agreement has resulted in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation has resulted, or may be expected to result, in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services."
