¹ Julie Bower relied on data and information from several archives, official Web sites and trade associations while completing her PhD thesis at the University of Warwick. All merger reports are accessible from the Web sites of the Competition Commission (www.competition-commission.org.uk), the European Commission (http://ec.europa.eu/dgs/competition/index_en.htm), and the Federal Trade Commission (www.ftc.gov/bc/index.shtml). Antitrust investigation reports on the U.K. brewing industry (1969 and 1989) are available in hard copy from Her Majesty's Stationary Office. Press releases relating to the 1989 antitrust investigation are available on request from the archive of the U.K. government's Department for Business, Innovation and Skills. Firms' annual reports can be accessed from the archives of the London Business School and the University of Strathclyde (Matthew Brown and J. W. Cameron only). Data are also available on request from the British Beer and Pub Association (annual Statistical Handbook). Scottish & Newcastle plc kindly sent various items from its firm archive, including copies of listing particulars for all the mergers referred to in this article, in addition to offer and defense documents. Julie Bower also relied on material written during her time as an investment analyst at various City of London investment banks from 1992 to 1999.

² da Silva Lopes, Teresa, “Brands and the Evolution of Multinationals in Alcoholic Beverages,” Business History 44 (July 2002): 1–30CrossRefGoogle Scholar, ascribes “merger waves” in the alcoholic beverages industry to a combination of several factors related to the evolution of the industry and also to the strategy of the firms.

³ Gourvish, Terry R. and Wilson, Richard G., The British Brewing Industry 1830–1980 (Cambridge, U.K., 1994)Google Scholar, chart the development of the Big Six national brewer-retailers through a series of mergers of family-owned regional brewers.

⁴ Monopolies and Mergers Commission (hereafter, MMC), “Scottish & Newcastle Breweries plc and Matthew Brown plc: A Report on the Proposed Merger,” Cmnd [Command of Her Majesty] 9645 (1985): 15Google Scholar.

⁵ A chronology of the key mergers of the Big Six from 1960 is shown in MMC, “Bass plc, Carlsberg A/S and Carlsberg-Tetley plc: A Report on the Merger Situation,” Cm [Command of Her Majesty] 3662 (1997): 141Google Scholar.

⁶ Bower, Julie, “Strategic Interactions with Competition Authorities in the U.K. Alcoholic Beverages Industry,” PhD thesis, University of Warwick, 2007Google Scholar.

⁷ Typified by Diageo and Pernod Ricard's joint bid for Seagram in 2001.

⁸ Most merger analysis has utilized the axioms of industrial economics. A recent review of competition policy in the U.K. brewing industry by Slade, Margaret M., “Competition Policy Towards Brewing: Rational Response to Market Power or Unwarranted Interference in Efficient Markets?” in The Economics of Beer (Oxford, U.K., 2011)Google Scholar is a good example of this approach. The study finds that the remedies adopted by the Monopolies and Mergers Commission during the 1980s for the purpose of generating industry efficiency and benefiting consumers produced questionable results. While acknowledging the strong influence of political lobbying, the study, however, makes no comment on how it affected policy.

⁹ Toms, Steve and Wright, Mike, “Corporate Governance, Strategy and Structure in British Business History, 1950–2000,” Business History 44 (July 2002): 91–124CrossRefGoogle Scholar.

¹⁰ For the development of U.K. competition policy, see Wilks, Stephen, In the Public Interest: Competition Policy and the Monopolies and Mergers Commission (Manchester, U.K., 1999)Google Scholar.

¹¹ The Competition Commission Web site sets out the current role of the various regulatory bodies and the law that relates to antitrust and merger provision in the U.K.

¹² Stigler, George J., “The Theory of Economic Regulation,” Bell Journal of Economics and Management Science 2 (Spring 1971): 3–21CrossRefGoogle Scholar, proposes as a general hypothesis that every industry with enough political power to utilize the state will seek to control entry and retard the rate of growth of new firms. Posner, Richard A., “Theories of Economic Regulation,” Bell Journal of Economics and Management Science 5 (Autumn 1974): 335–58CrossRefGoogle Scholar, distinguishes the “public interest” theory as a response to the demand from the public that markets work efficiently and fairly from a second “capture” theory that is “espoused by an odd mixture of welfare state liberals, muckrakers, Marxists and free-market economists.”

¹³ Laffont, Jean-Jacques and Tirole, Jean, “The Politics of Government Decision-Making: A Theory of Regulatory Capture,” Quarterly Journal of Economics 106 (Nov. 1991): 1089–127CrossRefGoogle Scholar.

¹⁴ Martimort, David, “The Life Cycle of Regulatory Agencies: Dynamic Capture and Transaction Costs,” Review of Economic Studies 66 (1999): 929–47CrossRefGoogle Scholar, conjectures that capture is enforced through repeated interactions.

¹⁵ Dal Bó, Ernesto, “Regulatory Capture: A Review,” Oxford Review of Economic Policy 22, no. 2 (2006): 203–25CrossRefGoogle Scholar, discusses political influence in the U.S. telecommunications industry.

¹⁶ Kay, John, “Better a Distant Judge Than a Pliant Regulator,” Financial Times, Nov. 3, 2010Google Scholar.

¹⁷ Coate, Malcolm B., Higgins, Richard S., and McChesney, Fred S., “Bureaucracy and Politics in FTC Merger Challenges,” Journal of Law and Economics 33 (Oct. 1990): 463–82CrossRefGoogle Scholar. This paper, co-authored by economist Fred McChesney and two former employees of the Federal Trade Commission, made use of non-public information taken from internal FTC files and was obliged to carry a disclaimer stating that the FTC Bureau of Economics had major disagreements with the methodology, analysis, inferences, and conclusions contained in the paper.

¹⁸ Aktas, Nihat, de Bodt, Eric, and Roll, Richard, “Is European M&A Regulation Protectionist?” Economic Journal 117 (July 2007): 1096–121CrossRefGoogle Scholar.

¹⁹ Bougette, Patrice and Turolla, Stéphane, “Merger Remedies at the European Commission: A Multinomial Logit Analysis,” MPRA [Munich Personal RePEc Archive] paper 2461 (Apr. 2007)Google Scholar.

²⁰ Jones, Geoffrey and Miskell, Peter, “European Integration and Corporate Restructuring: The Strategy of Unilever c.1957–c.1990,” Economic History Review 58, no. 1 (2005): 113–39CrossRefGoogle Scholar.

²¹ Lords Hansard, 14 Nov. 2005, column 904. [Hansard is the written record of U.K. Parliamentary debate, either from the House of Commons or the House of Lords].

²² For example, donations from Allied-Lyons to the Conservative Party in 1991 amounted to £110,000, those of Scottish & Newcastle were £50,000 in 1997, and those of Whitbread were £15,000 in 1990. Donations ceased after those years.

²³ See MMC, “The Supply of Beer: A Report on the Supply of Beer for Retail Sale in the United Kingdom,” Cm 654 (1989): 111–12Google Scholar, for details about the members of the Brewers Society and its conduct in the inquiry. Following an intense lobbying campaign, the Brewers Society was credited with forcing the government to partially back down (“Decision on Beer Orders,” DTI [Department of Trade and Industry] Press Notice 89/745).

²⁴ Hansard, 15 Feb. 1995. In a debate on extending Sunday trading hours, Donald Anderson, Labour MP for Swansea, East made this comment: “the brewers were becoming pretty unhappy with the performance of what they deemed to be their Government, and the Government hoped to win back the support of the brewers, which, after all, had provided 10 percent of Conservative party funds at the previous general election.”

²⁵ Jones, Geoffrey and Wadhwani, R. Daniel, “Entrepreneurship and Business History: Renewing the Research Agenda,” Harvard Business School working paper 07–007 (2006)Google Scholar, conclude that there are opportunities for advancing understanding of the historical role of culture and values on entrepreneurial behavior and the role of institutions in economic growth by exploring the precise relation between institutions and entrepreneurs. da Silva Lopes, Teresa and Casson, Mark, “Entrepreneurship and the Development of Global Brands,” Business History Review 81 (Winter 2007): 651–80CrossRefGoogle Scholar, distinguish between a “traditional” entrepreneur that flourished in the late-nineteenth and early-twentieth centuries and an “expanded” version of an entrepreneur that emerged in the mid-twentieth century, when professional managers were recruited to manage firms that now relied on external shareholders for capital.

²⁶ MMC, “Beer: A Report on the Supply of Beer,” HC [House of Commons] 216 (1969): 7Google Scholar, cites Mr.Charrington, J. A. P., president of Charrington, Bass, in the Times, 22 Apr. 1968Google Scholar, in ascribing regional taste preferences that underpinned the regional nature of the U.K. brewing industry.

²⁷ Gourvish and Wilson, The British Brewing Industry.

²⁸ Commission, Price, “Beer Prices and Margins,” report no. 31 (1977)Google Scholar, points to the adverse effect on beer prices of a combination of high concentration and vertical integration in the brewing industry, reinforced by restrictive licensing laws.

²⁹ In MMC, “Scottish & Newcastle Breweries plc and Matthew Brown plc” (1985): 16Google Scholar; Scottish & Newcastle's 1985 beer sales being some 20 percent below their 1975–76 peak.

³⁰ “Obituary: Sir Alick Rankin,” Independent, 6 Aug. 1999Google Scholar.

³¹ See Campaign for Ale, Real [CAMRA], Opening Times, no. 139 (2009): 6Google Scholar.

³² While many third parties were against the merger, in particular those representing interests in the Northwest, others including two Newcastle MPs held supporting views. MMC, “Scottish & Newcastle Breweries plc and Matthew Brown plc,” 56–57Google Scholar.

³³ Margaret Thatcher Foundation, Margaret Thatcher's speech to the Scottish Conservative Conference, 11 May 1984.

³⁴ The traditional vertically integrated structure of the U.K. beer market was underpinned by a property tie. The brewers owned licensed premises, both managed and tenanted, where only their brands were sold. However, a major part of the free trade was also tied to the large national brewers by way of loans, often at levels considerably below market interest rates in return for various buying obligations.

³⁵ MMC, “Scottish & Newcastle Breweries plc and Matthew Brown plc,” 64Google Scholar.

³⁶ Ibid., 66.

³⁷ In an Adjournment debate, Jack Straw, Labour MP for Blackburn, pointed to the “flagrant breach of categorical undertakings to keep open the Blackburn brewery given by Scottish & Newcastle to the Monopolies and Mergers Commission in 1985 and repeated on many subsequent occasions in 1987, 1988 and 1989. The question raised by Scottish & Newcastle's conduct is identical to that which arose in the takeover of Distillers by Guinness.” Hansard, 22 Nov. 1990.

³⁸ SirRankin's, Alick obituary noted that Elders IXL was “not conspicuously constrained by the finer points of British market etiquette.” Independent, 6 Aug. 1999Google Scholar.

³⁹ “Drinks analysts wistfully recall the heady 1980s when Allied Domecq hired Concorde for a week, and flew them all to whisky distilleries in Scotland, Canada, America and France; ‘I think that marked the peak,’ says one.” Telegraph, 24 June 2000Google Scholar.

⁴⁰ Imperial bought Courage in 1972 as part of its strategy of diversifying away from tobacco.

⁴¹ “Scottish & Newcastle Breweries plc Support a Successful Company—Reject the Elders Offers,” [Scottish & Newcastle defense document] 7 Nov. 1988, 3Google Scholar.

⁴² The Lex Column, Financial Times, 12 May 1988, 5Google Scholar.

⁴³ MMC, “Elders IXL Ltd. and Scottish & Newcastle Breweries plc: A Report on the Merger Situations,” Cm 654 (1989): 94Google Scholar.

⁴⁴ ‘Parr is taking another punt on Pontin's’, Daily Telegraph, 30 Mar. 2008, 2Google Scholar.

⁴⁵ MMC, “The Supply of Beer” (1989): 31Google Scholar.

⁴⁶ Ibid., 5.

⁴⁷ MMC, “Elders IXL Ltd. and Scottish & Newcastle Breweries plc,” 63–64Google Scholar.

⁴⁸ Bower, “Strategic Interactions,” shows U.K. beer consumption from 1899 to 2004 in Table 2.3.

⁴⁹ MMC, “The Supply of Beer,” 118Google Scholar.

⁵⁰ MMC, “Elders IXL Ltd. and Grand Metropolitan plc: A Report on the Merger Situations,” Cm 1227 (1990): 11–12Google Scholar, gives estimates of capacity utilization for the major U.K. brewers.

⁵¹ “Who Will Toast Victory in the Brewing Beer Wars,” Herald Scotland, 19 Oct. 2007Google Scholar.

⁵² Gourvish, Terry R., “Mergers and the British Brewing Industry,” in Management and Business in Britain and France (1995), eds. Cassis, Y., Crouzet, F., and Gourvish, T.R., Clarendon Press, U.K.Google Scholar, refers to a market strategy for all the major brewers, except Guinness, that from 1880 to 1900 was based on the acquisition of existing firms to build vertically integrated structures.

⁵³ Courage acquired the brewing assets of Grand Met. Grand Met took a 50 percent share-holding in the Courage tenanted pub operation, renamed Inntrepreneur Estates Ltd. (IEL), and injected its 3,565 tenanted pubs. Both the wholly owned Grand Met–managed pubs and IEL signed ten-year exclusive supply contracts to Courage, subsequently revised to five years to comply with EU law.

⁵⁴ In MMC, “Elders IXL Ltd. and Grand Metropolitan Plc” (1990): 35–36Google Scholar, Courage gave evidence of readily attainable efficiencies. In MMC, “Allied-Lyons plc and Carlsberg A/S: A Report on the Proposed Joint Venture,” Cm 2029 (1992): 44Google Scholar, there is broad agreement with Courage on the strong buying power of the multiple grocers and the potential for considerable efficiency savings in both beer production and distribution.

⁵⁵ Figure 1 depicts the Big Six at the time of the 1995 merger of Scottish & Newcastle and Courage. In aggregate they accounted for approximately 80 percent of U.K. production. Guinness was categorized separately, in “Brewers without Tied Estate” in the 1989 MMC inquiry, which, in aggregate, accounted for 8 percent of U.K. production and is omitted from this chart; it was not a vertically integrated U.K. brewer and its major focus was outside the U.K.

⁵⁶ The acquisition gave Scottish & Newcastle two of the U.K.'s leading beer brands, Foster's and John Smith's, that collectively accounted for nearly 30 percent of Courage's volume. Foster's was the second largest lager brand in the U.K. The deal also added modern and relatively more efficient plants at Reading and Tadcaster to add to the existing brewery and then state-of-the-art canning line in Edinburgh.

⁵⁷ “Scottish & Newcastle plc Proposed Acquisition of the Courage Business and Rights Issue,” Listing Particulars document (1995): 8Google Scholar.

⁵⁸ “Scottish & Newcastle plc: Proposed Acquisition of the Chef & Brewer Estate and Rights Issue,” Listing Particulars document (1993): 4Google Scholar.

⁵⁹ Julie Bower attended the analyst briefing on the day of the merger announcement.

⁶⁰ Brewery, Matthew Brown, Adjournment debate called by MrStraw, Jack, Labour MP for Blackburn, Hansard, 22 Nov. 1990Google Scholar.

⁶¹ Bass Carlsberg Tetley would have created the U.K.'s largest brewer with 37 percent market share of beer production and a tied estate of 4,400 pubs.

⁶² MMC, “Bass plc, Carlsberg A/S and Carlsberg-Tetley plc: A Report on the Merger Situation,” Cm 3662 (1997): 30Google Scholar, noted that Professor Newbery, while fully accepting the public interest findings, was not persuaded that the proposed remedy would adequately address the substantial increase in market power accruing to BCT.

⁶³ “The bid by brewery giant Whitbread for the pub and restaurant business of Allied Domecq has suffered a serious setback, after a decision by Trade Secretary Stephen Byers to refer the deal to the Competition Commission,” BBC Web site (www.news.bbc.co.uk/1/hi/business/394496.stm), 14 July 1999.

⁶⁴ “Obituary: Sir Alick Rankin.”

⁶⁵ Casson, Mark, The Entrepreneur: An Economic Theory (New York, 1982), 9Google Scholar, sets out the dichotomy of neoclassical economic theory and the Austrian school in developing an adequate predictive economic theory of the entrepreneur.

⁶⁶ Jones, and Wadhwani, , “Entrepreneurship and Business History,” 34Google Scholar.