The Office of Fair Trading (OFT) is considering whether the joint venture set up between the UK’s largest pub company Punch Taverns and the largest wine company in the world, Constellation Brands, represents a merger.

If the deal announced last month does constitute a merger under the terms of the Enterprise Act 2002 the OFT could refer it to the Competition Commission as detrimental to competition in the UK drinks supplier market.

Punch and Constellation Europe (the division of Constellation Brands formed in April 2004 through the merger of Constellation Wine Europe and Matthew Clark) plan to form a holding company with 50/50 ownership of Matthew Clark.

The joint venture values the wholesaler and distributor at £120m with Punch matching Constellation’s retained investment of £35m.

The remaining balance of £50m exists as non-recourse debt (a secured loan linked to collateral).

Steve Thomson, current director of wholesale at Matthew Clark, will continue to run the business independently.

Matthew Clark is the sole wine distributor to JD Wetherspoon.

OFT website >>

Constellation Brands >>

Matthew Clark website >>

By Chris Druce

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