GUS, which is already embroiled in a pounds 1.6bn hostile bid for Argos, said it noted the action initiated on Wednesday by American Business Information and said: "GUS intends to vigorously assert its rights and will make a further statement when and if appropriate." American Business Information, based in Omaha, has made a counter bid of pounds 515m and launched legal action claiming that GUS had knowingly aided and abetted alleged breaches of conduct by Metromail's management.Analysts said the legal action and the prospect of a bid auction could prove distracting for GUS's management as the Argos battle heated up But they said the company could still pull off both deals. Competition in the cider market has intensified in recent years following a sharp fall in sales.. "We remain totally confident in its [Dry Blackthorn's] integrity," said a spokesman for the group. "Of course we will respond vigorously if claims of this kind are made. One phone call was made by Matthew Clark to Bulmer this morning [Thursday] but they did not commit themselves and said they would look at the situation."Strongbow and Dry Blackthorn are the most popular cider brands in the UK and their future success is vital to the financial fortunes of both groups.
Bulmer already uses an arrow symbol on a black background on its Strongbow packaging. Strongbow, like Blackthorn, is the subject of a high profile marketing drive which will see the two companies come head to head with each in the battle for a bigger slice of the troubled cider market. A spokeswoman for Bulmer's said yesterday: "No legal action is being taken at the moment and we are in discussions with Matthew Clark." However the group did not rule out taking legal action in the future.Matthew Clark denied the two parties were holding detailed discussions. It is concerned that Dry Blackthorn now bears close resemblance to Strongbow, its own best-selling cider. Matthew Clark is relaunching Blackthorn this week, backed by a pounds 7m advertising campaign. The new bottles and cans of cider have a motif in the shape of a gold arrow on a black background. A further 350 jobs will be shed in the rail division this year..
BRITAIN'S two biggest cider makers could become embroiled in a legal battle over best selling brands. HP Bulmer, the market leader, is considering suing Matthew Clark over its arch-rival's new look Dry Blackthorn brand. This helped lower pre-tax profits from pounds 60.1m in 1996 to pounds 54.8m.There were a further pounds 17.5m of charges to cover restructuring costs, mainly in its rail franchises where staffing levels fell by 700. Eurostar losses are currently running at pounds 180m a year.The other option would be for the Government to contract out the operation of the service, in which case the two companies would be paid a management fee.Colin Child, National Express finance director, said he did not believe it would be tainted by its involvement with LCR, which pulled out of its agreement to build the rail link in February after being refused a further pounds 1.2bn in subsidies.He also said the two companies would address any competition problems that might arise because of BA's already dominant position in the air market between London, Paris and Brussels.The group's results for 1997 were hit by a pounds 10.8m provision against its investment in LCR. One is to take over the Eurostar service between London, Paris and Brussels on a franchise basis, which would entail the Government providing subsidies in the early years to cover operating losses.
