Kegstar’s proposed acquisition of Konvoy’s failed keg business has faced hurdles from the Australian competition regulator.
The Australian Competition and Consumer Commission (ACCC) has outlined its preliminary competition concerns with the merger between MicroStar, which operates as Kegstar in the country, and Konvoy. Konvoy collapsed into administration and receivership earlier this year.
According to the ACCC, both companies provide keg pooling services, allowing brewers to rent kegs from a shared pool on a short-term basis to supply alcoholic beverages to their customers.
The proposed acquisition would combine the only two providers of keg pooling services in Australia, the regulator added.
“Many craft breweries appear to be reliant on keg pooling services to supply pubs and bars beyond local areas, and they are likely to have neither the ability nor the incentive to invest to self-supply and manage a fleet of kegs,” said ACCC commissioner Philip Williams.
Meanwhile, a recent ACCC survey showed that alternatives to keg pooling services, such as key leasing or ownership, are not a close substitute.
In addition, other businesses are not likely to start supplying keg pooling services in competition.
“Our preliminary view is that the proposed acquisition is likely to substantially lessen competition in the supply of keg pooling services in Australia,” Williams added.
The ACCC will receive submissions from interested parties in response to the matter until August 28.
Last month, Kegstar also submitted a clearance application to the Commerce Commission for its proposed acquisition of Konvoy New Zealand’s assets.
