§ Mr. Goodladasked the Secretary of State for Trade when he expects to publish the report of the Monopolies and Mergers Commission on the proposed merger between Hiram, Walker-Gooderham and Worts Limited and the Highland Distilleries Company Limited.
§ Mr. EyreMy right hon. Friend received the report on 16 July; it was published on 6 August. The Monopolies and Mergers Commission concluded unanimously that the proposed merger might be expected to operate against the public interest, and recommended therefore that it should not be permitted.
The commission thought it likely that an independent Highland would be more successful in export markets. More generally it considered that, in view of the different styles of management and personalities involved in Highland and Hiram Walker, the merger might be expected to result in a loss of efficiency in Highland which would lead to its being less successful in the export market, and affect its ability to compete in the home market. It also considered that the merger was likely to have an adverse effect on a limited number of career opportunities in Scotland. In respect of competition in the United Kingdom blended whisky market it believed that, by allowing Hiram Walker to acquire an existing successful blend, the merger was likely to limit the possibility of further competition from existing or new blends from Hiram Walker & Sons 393W (Scotland) Ltd. Its major concern, however, was in relation to the further increase in concentration of distillery ownership which would be brought about by the merger, which it believed might be expected to operate to limit the degree and nature of competition in the market for malt whisky fillings. It considered the undertaking offered by Hiram Walker in relation to the supply of whisky fillings, but did not consider that such an undertaking would safeguard the level or nature of competition.
Since it could find no benefits arising from the merger to Highland, which it believed to be an efficient innovative and competitive company, to offset the adverse effects it had identified, it considered that the merger should not be allowed. In reaching this conclusion it implied no criticism of Hiram Walker (Scotland), which it found to be a vigorous and expanding company which had made a considerable contribution to the Scotch Whisky industry.
I. UNITED KINGDOM IMPORTS BY WEIGHT Thousand tonnes July-December January-June July-December January-June July-December January-June 1977 1978 1978 1979 1979 1980 Anthracite … … … … 170 110 108 93 158 141 Steam coal … … … … 680 487 265 299 1,463 2,280 Coking coal … … … 685 575 797 924 1,438 1,127 Gas coal … … … … 18 9 — — — — Briquettes, ovoids and similar solid fuels manufactured from coal … … … … 47 30 47 48 44 84 Lignite, whether or not agglomerated … … … … — — — — * * Coke and semi-coke of (i) coal … … … 8 14 1 22 91 (ii) lignite … … … * * * — — — TOTAL … … … 1,609 1,224 1,217 1,386 3,195 3,634
394W
II. UNITED KINGDOM IMPORTS BY VALUE £ million cif July-December January-June July-December January-June July-December January-June 1977 1978 1978 1979 1979 1980 Anthracite … … … … 7.7 5.0 5.1 4.5 7.7 7.9 Steam coal … … … … 16.8 12.3 6.6 8.5 40.3 61.6 Coking coal … … … 24.6 20.2 27.6 29.7 46.8 34.2 Gas coal … … … … 0.5 0.4 — — — — Briquettes, ovoids and similar solid fuels manufactured from coal … … … … 2.3 1.5 2.5 2.8 2.7 6.0 Lignite, whether or not agglomerated … … … … — — — — 1 1 Coke and semi-coke of (i) coal … … … 0.7 1.1 0.1 0.8 3.7 0.2 (ii) lignite … … … 1 1 1 — — — TOTAL … … … 52.6 40.5 41.8 46.3 101.3 109.9 In accordance with the advice of the Director General of Fair Trading, my right hon. Friend is accepting the commission's recommendation and is requesting the Director General to consult Hiram Walker with a view to obtaining undertakings not to proceed with the proposed acquisition.