The UK’s Competition and Markets Authority (CMA) has approved the proposed joint venture (JV) between the two brewing companies Carlsberg and Marston’s. 

The proposed £780m ($1bn) deal was first announced in May when Carlsberg UK reached an agreement with British brewery, pub and hotel operator Marston’s to establish the JV beer company in the country. 

Under the agreement, both companies agreed to inject their brewing and distribution assets into the JV called Carlsberg Marston’s Brewing Company. 

CMA noted that it approved the merger after investigating whether the deal harms beer and cider supply competition in the UK. 

As part of its investigation, CMA also examined if Marston’s currently owned or operated pubs may favour selling more Carlsberg products and opt to market fewer independent brands following the merger. 

CMA identified that Marston’s pubs have a small potential customer base in the UK for brewers, and the merger would not impact independent brewers as they would have sufficient access to pubs after the merger. 

In a statement, CMA said: “It also considered whether combining the wholesaling services that both companies provide, through which they distribute their own and other producers’ drinks to pubs and restaurants, could raise competition concerns. 

“While the establishment of the joint venture means that the two businesses are likely to distribute each other’s products more frequently, potentially leaving less room to take on other brands, the CMA found that brewers will continue to have sufficient alternative wholesalers to choose from after the merger.” 

Furthermore, CMA found that Carlsberg and Marston’s have diverse focus areas with Carlsberg mostly concentrating on the production of lager and Marston’s on ale. 

CMA also identified that the two companies already have many competitors in all the product categories they offer. 

Hence, the competition watchdog concluded that the deal does not give rise to competition concerns.