Cider Australia says Asahi-CUB deal puts market at risk

05 August, 2019 by Andy Young

Cider Australia wants the ACCC to consider the cider category separately when it reviews Asahi’s proposed bid to buy Carlton & United Breweries.

After Asahi’s $16bn deal for CUB was tabled in July, the ACCC said it had been notified of the proposed transaction and would begin a public review once a submission was received.

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But Cider Australia President Sam Reid said the industry body was concerned about the impact of the deal given that a combined Asahi/CUB business would control around 70 per cent of the category by volume share.

“Unlike beer where different sub-segments of the category – such as Pale Ale, IPA and Sour Beers – are well established, tap contracts for cider tend to cover the entire category,” Reid said.

“Such a significant consolidation in brand ownership is likely to further limit competition and innovation in the cider category to a far greater extent than in beer.

“We encourage the ACCC to independently consider the competitive landscape for cider, including to re-consider the impacts of tap contracts given they can completely lock out new and emerging products.

“It may be time to consider prohibiting non-price incentives in tap contracts, or even getting rid of tap contracts completely.

“With the advent of Cider Australia’s 100% Australian Grown trust mark, a level playing field for smaller cider producers and Australian apple and pear growers is as important as ever.”

Meanwhile the Chair of the Independent Brewers Association, Jamie Cook, told TheShout that deals like the one proposed by Asahi is helping drive consumers towards independent brewers.

“Despite the on-going M&A activity going on among the large global brewers we continue to see the volumes of independent beer rising (up 25 per cent vs a year ago) to six per cent of the total beer volume as consumers, retailers and publicans, who are becoming increasingly disillusioned by ownership changes, shift towards buying beer from small independent brewers.”

Last week TheShout reported that Peter Margin, the Executive Chairman of Asahi Australia said he could see a “terrific future” for the combined business should the deal go ahead.