Kegstar has once again failed to receive clearance for its proposed acquisition of Konvoy Holdings due to competition concerns.
MicroStar Logistics, which operates under the name Kegstar in Australia, primarily offers keg pooling services, which allow brewers to rent kegs on a short-term basis to supply alcoholic drinks on tap to licensed venues.
Konvoy also operates similar services, as well as longer-term keg leasing, maintenance and repair, in Australia and New Zealand. The company entered voluntary administration and receivership last March, with the receivers undertaking a sale process and selecting MicroStar as the buyer.
Kegstar sought informal merger clearance last June, but the ACCC announced its decision to oppose the acquisition under the informal merger regime in October.
In February, the company once again notified the ACCC of its proposal to acquire Konvoy’s assets under the new merger regime that commenced at the start of this year.
Having concluded its assessment, the ACCC said the deal would substantially lessen competition in the supply of keg pooling services in Australia.
“Without competitors, MicroStar could increase prices above a competitive level and reduce services or quality of service for customers, in particular independent brewers,” said ACCC commissioner Philip Williams.
The regulator also believed a new competitor would not enter in a timely and sufficient way to meaningfully constrain Kegstar from increasing prices or reducing the quality of its services following the acquisition.
“While recognising that Konvoy’s assets may ultimately be liquidated, our assessment showed that there is a real prospect of the business being acquired by an alternate buyer and continuing under new ownership,” Williams added.
