Pub goers in Sheffield could end up paying more for their favourite drink after Heineken agreed to buy Punch Taverns pub, the UK competition watchdog has warned.
Heineken's £403 million takeover of pub chain Punch Taverns could impact competition, causing prices to go up, the Competition and Market Authority warned.
The CMA has identified 33 areas across Britain which could be reduced by the deal and warned Heineken has until June 20 to address their concerns, or face an in-depth probe.
Andrea Coscelli, acting chief executive of the CMA and decision-maker in the case, said: "We have listened very carefully to a range of concerns about this merger.
"The companies will own less than 10% of all British pubs after any deal, but we are concerned about the loss of competition for pub goers in a number of local areas.
"Without sufficient competition from rivals, pubs in these areas might be able to raise prices or worsen the service they offer customers."
Heineken said it was putting together proposals to address the CMA's concerns and was "confident" these would allow the deal to go ahead as planned by the end of August without a full-scale probe.
David Forde, managing director for Heineken UK, said: "This decision by the CMA acknowledges that there are only a small number of local areas where competition may be diminished due to our acquisition.
"We are confident we can offer the CMA suitable undertakings to satisfy their concerns," he said.
But the Competition and Markets Authority (CMA) said it did not believe the controversial tie-up would significantly cut the choice of tipples available.
This comes despite industry fears Heineken would give preference to its own beers and ciders and close off an important route to market for brewers that compete with the Dutch giant.
The CMA said the 1,895 Punch pubs being snapped up by Heineken, which it will add to 1,100 leased pubs it already owns across the UK, only account for 4% of the market and is therefore "not a major route to market for brewers".
Punch Taverns owns a number of pubs in Sheffield, including the Rose & Crown, New Inn and Mount Pleasant.