Byers blocks Interbrew deal

Trade and industry secretary Stephen Byers has decided not to permit the £2.3b takeover of Bass's brewing interests by Belgian firm Interbrew.

"The merger would reduce competition in the market, lead to higher prices for end consumers, and reduce consumer choice," he said.

His decision followed advice from the Competition Commission and the director general of fair trading that the deal would increase Interbrew's share of the market to more than 33%.

It would also create an effective duopoly in the UK between Interbrew and Scottish & Newcastle.

Interbrew also owns Whitbread's brewing interests, which it bought for £400m in May.

The minister's decision will not affect Bass, since the sell-off was completed in August and did not depend on approval from the Competition Commission.

"We're noting the decision, but it has no direct impact for Bass plc," said a spokeswoman.

Analysts expect Bass to use the proceeds from the sale to buy a major international hotel chain.