United Spirits on Tuesday informed the exchanges that its board will meet to consider the concerns raised by the Office of Fair Trading, UK, (Competition regulatory body) after the acquisition by Diageo plc of its stake. The company, however, has not mentioned the date of board meeting.
Britain’s Office of Fair Trading (OFT) had found that a merger could lead to “substantial lessening of competition in the supply of blended whisky to retailers”.
“The parties are major suppliers of bottled blended whisky to retailers with Whyte & Mackay also being an important supplier of own-label blended whisky,” the OFT said in a statement.
“The OFT’s investigation found that there is substantial competition in the retail sector between Bell’s whisky, a Diageo label, and Whyte & Mackay’s own label and branded blended whisky,” it added.
Following these observations, Diageo offered to sell most of Whyte & Mackay, with the exception of two malt distilleries.
Shares of United Spirits tumbled to as low as Rs 2,400 in early trade on Tuesday, but has recovered to trade at Rs 2,569.75, still down about 2 per cent over the previous day' close.
“The board of directors will consider OFT announcement and determine further course of action,” the company informed the exchanges.