Last chance for making ACCC submissions on Asahi-CUB deal

20 January, 2020 by Andy Young

The deadline for interested parties to make submissions to the Australian Competition & Consumer Commission (ACCC) regarding Asahi’s proposed acquisition of Carlton & United Breweries is this Wednesday.

In December last year the competition watchdog said that it had some concerns that the proposed deal would reduce competition in the market for cider and may also reduce competition in the beer market.

Advertisement

At the time, ACCC Chair Rod Sims said: “The proposed acquisition would combine the two largest suppliers of cider in a highly concentrated market.

“A combined Asahi-CUB would control the Somersby, Strongbow, Mercury and Bulmers cider brands, which account for about two thirds of cider sales. We are concerned that the proposed acquisition may lead to higher cider prices.”

“Asahi argued to us that cider and beer are part of the same market, but our preliminary view is that cider is a separate market and drinkers do not readily switch between beer and cider,” Mr Sims said.

“The ACCC also has preliminary competition concerns about the highly concentrated beer market. While Asahi is currently a relatively small brewer in Australia, accounting for approximately 3.5 per cent of beer sales here, our preliminary view is that Asahi may act as a competitive constraint on the two largest beer brewers, CUB and Lion, and has the potential to be an even bigger threat in future.

“Our preliminary view is that having Asahi in the market as a competitor to the big two brewers may help to keep a lid on beer prices. This competitive presence, and the threat of Asahi growing more in the future, would be lost if this deal goes ahead.”

The ACCC published a Statement of Issues alongside its preliminary concerns and invited interested parties to make submissions regarding those, and the deadline for those is this Wednesday, 22 January.

The ACCC said that its final decision for the proposed deal is scheduled for 19 March 2020. You can find out more about the Statement of Issues and the ACCC’s review of the deal on the ACCC website.