ACCC seeking further consultation on Asahi-CUB deal
The Australian Competition and Consumer Commission (ACCC), is seeking further consultation and views on Asahi’s proposed acquisition of Carlton & United Breweries.
In December last year the competition watchdog raised concerns about what the proposed deal would mean to Australia’s cider market.
Further to that the ACCC is now seeking views on the a proposed divestment by Asahi of the Strongbow, Bonamy’s and Little Green cider businesses, and the Stella and Becks beer businesses, to a purchaser(s) approved by the watchdog.
“The release of the proposed divestment undertaking for public comment should not be interpreted as a signal that the ACCC will ultimately accept the undertaking and clear the transaction. We are following our usual practice of publicly consulting on a proposed divestment package,” ACCC Chair Rod Sims said.
“We are seeking feedback from industry participants on whether the divestment package will be sufficient to address the competition concerns.”
Sam Reid, the President of Cider Australia, welcomed the move, telling TheShout: “We’re pleased that the ACCC listened to and acted upon our initial submission and recognised that Cider is its own distinct category, with its own set of drinkers.
“We’re slightly surprised by but overall please with this outcome. The divestment of these brand will take their combined share to below 50 per cent of the category, and ensure continued vigorous competition within the cider category moving forward which can only be a good thing for Australian cider drinkers.”
In relation to beer, the ACCC noted that Asahi, while having a low market share, appears to be a vigorous competitor to the two major beer suppliers, and this competition will be removed if the acquisition proceeds.
The ACCC now seeks views from market participants on whether the proposed undertaking would be likely to alleviate its competition concerns. Parties wishing to make a submission should do so by 18 March 2020.
Asahi has welcomed the ACCC’s announcement, saying that it has been working closely with the watchdog and has proposed undertakings to address the preliminary concerns the ACCC raised in December in relation to this acquisition.
Asahi Beverages Chairman, Peter Margin, said: “We understand and respect that the ACCC must undertake a thorough process to ensure that the deal does not reduce competition and is in the interests of consumers. Asahi’s acquisition of CUB is a significant one and we have always expected that the review process would take some time.
“We are working towards completing the deal as soon as possible once we have received regulatory approvals from both the ACCC and the Foreign Investment Review Board.”
Asahi said that if the ACCC approves the deal it will undertake a process to find a suitable buyer for the proposed brands.