By Andy Young
The Australian Competition and Consumer Commission (ACCC) has written to interested parties asking for views on the proposed acquisition of SAB Miller by AB InBev.
The proposed acquisition is undergoing regulatory reviews around the world and the ACCC has called for views to be submitted by 15 February 2016. The proposed date for the announcement of the ACCC’s decision is 14 April 2016. The ACCC said that this date may see the issuing of the final decision of the release of a Statement of Issues.
In its letter to interested parties regarding the proposed acquisition, the ACCC said: "Globally, AB InBev produces, markets and distributes beer, cider and soft drink. AB InBev does not supply its beer products directly in Australia. In Australia, AB InBev’s beer products are distributed under licensing arrangements, primarily via Lion Co. In Australia, SABMiller supplies alcoholic beverages (beer, cider and small volumes of other alcoholic beverages) via Carlton & United Breweries (CUB) and Pacific Beverages."
The ACCC added that its investigation will focus on the impact on competition and asked for particular view on:
- the likely impact on prices
- the extent to which large customers, such as supermarket chains, hotel groups or distributors, could sponsor entry or expansion by a rival supplier if the proposed acquisition were to result in a price increase
- whether the proposed acquisition would result in an increased ability and incentive for SABMiller/CUB and Lion (by virtue of Lion’s long-term license arrangements with SABMiller/CUB’s parent company, AB InBev) to coordinate their pricing or other supply terms.
In considering the proposed acquisition the ACCC applies Section 50 of the Competition and Consumer Act 2010. Section 50 "prohibits acquisitions that are likely to have the effect of substantially lessening competition in a market".
The is widespread speculation regarding what the ACCC's final decision will be, with the Commission's former chairman Allan Feys saying that the deal "will not have an easy ride through the ACCC".
In October Fels told Reuters: "The battle between second and third position often stimulates competition more generally in the market. In this case it's not clear there is a lot of surrounding competition, and therefore it could be that a cosy duopoly emerges."
He added: "It's conceivable that the merger is blocked internationally. But if it's not, if it sails through overseas but is blocked here, they'd have to consider calling off this part of the transaction."