By Andy Young
The Australian Competition and Consumer Commission has said it will not oppose AB InBev’s proposed acquisition of SABMiller.
ACCC Chairman Rod Sims said: “The ACCC has concluded that the proposed acquisition is not likely to substantially lessen competition in the Australian beer market.”
“The ACCC found that the proposed acquisition would not significantly change the current market structure. The two largest suppliers of beer in Australia are Lion and SABMiller, which owns Carlton & United Breweries (CUB).
“While AB InBev’s brands have been successful in Australia, particularly Corona, they have previously been distributed via either Lion or CUB. AB InBev has only a limited direct company presence in Australia and does not brew beer here.”
“The ACCC considers that the proposed acquisition is unlikely to result in higher beer prices for consumers,” Sims added.
In a statement about the decision the ACCC said: “Importantly, AB InBev has served notices to terminate agreements with Lion for the distribution of Corona and other AB InBev brands in Australia (subject to certain notice periods).
“The ACCC had been concerned that, if these distribution agreements continued, the proposed acquisition may have increased the ability and incentive for coordination between Lion and AB InBev/SABMiller. After the termination of these distribution agreements, the relevant beer brands will in future be distributed in Australia by AB InBev/SABMiller.”
Sims added: “The termination of the distribution arrangements therefore resolved the ACCC’s competition concerns.”
As it looks to gain regulatory approval for the takeover in key markets around the world AB InBev has already agreed to the sale of the Peroni, Grolsch and Meantime brands to Asahi, plus SABMiller’s share in CR Snow, which brews the world’s biggest selling beer, as well as the sale of SAB’s share in MillerCoors to Molson Coors. The company is also looking to sell some of SAB's eastern European beer brands and has agreed a one billion rand deal with the South African government to support farmers and the local beer industry.