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Heineken’s takeover of S&N to be probed

HEINEKEN'S takeover of the Scottish and Newcastle brewery is to be investigated by the same Government committee which examined the Kraft Cadbury takeover, The Journal can reveal.

The Business, Innovation and Skills Select Committee will look at evidence that there was not enough protection for thousands of S&N pensioners after the takeover by the Dutch lager maker in 2008. The evidence session is expected to take place in the autumn, and it will examine details of the takeover and in particular why Heineken did not pay any discretionary increases in pensions in 2010.

The S&N Pension Group, which was set up to challenge the company’s decision, wrote to the chairman of the BIS select committee in early June requesting a review.

The group claimed that a public undertaking had been given by Heineken during the final stages of the S&N takeover that it was the intention of the Dutch business to continue S&N’s long standing practice of providing discretionary rises on pensions in line with inflation.

But Heineken now says that it never intended to continue the practice and froze pensions where they had a discretion to do so.

Tom Ward, former corporate director of Scottish and Newcastle, said: “We are delighted that the Parliamentary Select Committee is going to hold a wide ranging inquiry. This is a good result as it will allow all the issues to be looked at in detail and with public scrutiny.”

Mr Ward, who is also a spokesman for the pressure group, said: “Before the takeover, we understood that Heineken NV, the parent company stood firmly behind their public and private commitments on pensions. To make a U-turn on this very public undertaking is deeply offensive”.

The pensioners are continuing with their campaign and have been in talks with relevant politicians and the trade union Unite. Charlie McKenna, 73, from Newcastle, was a tanker driver with S&N until he retired in 1999.

He said: “I am very pleased someone is going to look into this now.”

It has also now emerged that many hundreds of pensioners have made individual complaints to the Pension Ombudsman. The UK Take Over Panel has also been contacted to offer background help.

In a statement Heineken said: “The discretionary decision we took last year was based on the outlook for our fund at that time and we will be reviewing it again later this year. Of course we understand the strength of feeling among those who did not receive pension increases.”

The company said it was happy to continue dialogue and justify action to any relevant body who wished to review the matter.

12 Jul. 2011

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