Australia’s competition watchdog, ACCC, said it will not oppose Asahi’s proposed acquisition of Carlton & United Breweries (CUB) now that the Japanese beverage giant is offloading a number of its well known cider and beer brands.
ACCC had raised concerns that the deal could lessen competition in cider and beer due to the number of major brands across the two portfolios, prompting Asahi to put its Strongbow, Bonamy’s and Little Green cider brands and the Stella Artois and Beck’s beer brands up for sale.
ACCC chair Rod Sims said. said the sale of these brands to an ACCC-approved buyer will be sufficient to address competition concerns and invites another business to enter the relatively concentrated industry.
“The ACCC was concerned that without the divestments, the proposed acquisition would substantially lessen competition in the cider market and remove a vigorous and effective competitor in the beer market,” Sims said.
“Without the sale of five beer and cider brands including Strongbow and Stella Artois, the combined Asahi-CUB company would have accounted for two thirds of cider sales in Australia, and owned the two largest cider brands, Somersby and Strongbow.”
Asahi’s beer brands, including Asahi Super Dry, Peroni, Mountain Goat, Cricketers Arms and Two Suns, account for just 3.5 per cent of beer sales in Australia, but the ACCC was concerned that the deal would remove a rival “capable of competing strongly against the two largest beer brewers”, CUB and Lion.
Asahi welcomed the ACCC decision and is taking next steps to proceed with a sale.
“We will now be putting in place steps to establish a standalone, independent business unit to help manage the divestment of these brands,” Asahi said in a statement.
“The deal requires the approval of the Foreign Investment Review Board (FIRB) and Asahi will continue to work with the regulators towards this.”
Asahi has provided a court-enforceable undertaking to the ACCC to divest the five brands, which also ensures the brands get the same access to bars, pubs and clubs as well as off-premise space under tap-tying agreements as Asahi’s brands for the next three years.
CUB parent, AB InBev, has also provided a court-enforceable undertaking to facilitate the transfer of relevant beer brand rights and obligations to the future buyer or buyers.
The ACCC said it will issue a public competition assessment “in due course”.