Diageo considers putting whisky business up for sale

Tue, 26 Nov 2013 | BUSINESS SALE

The world’s biggest Scotch whisky distiller, Diageo, could sell off most of its Whyte and Mackay business in order to appease competition authorities.

The Office of Fair Trading (OFT) has stated that there was a “likely loss of competition” between Diageo’s Bell’s whisky brand and the Whyte and Mackay brand when the drinks giant acquired the latter in securing a stake in India’s United Spirits in 2012.

The deal, worth around £590 million, also saw Diageo take partial control of Whyte and Mackay’s former parent company, United Spirits. In doing so the company effectively increased its share of the whisky market to around 40 per cent.

Chris Walters, chief economist with the OFT, commented on the proposed solution of a business sale: “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.

“We are now considering Diageo’s offer to sell the bulk of the Whyte and Mackay business with the exception of two malt distilleries [Dalmore and Tamnavulin], to address our concern.”

If the proposed sale is accepted, the OFT will be required to approve a suitable buyer that would encourage a higher level of competition within the sector.

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