The Australian Competition and Consumer Commission (ACCC) has said it will not oppose Asahi’s $16bn acquisition of Carlton & United Breweries after Asahi agreed to divest two of its beer brands and three cider brands.
The brands to be sold are Stella Artois and Beck’s as well as Strongbow, Bonamy’s and Little Green cider. The ACCC said it will need to approve the future buyer of the brands, and Asahi said it welcomed the decision and had agreed to the divestment.
A spokesperson for Asahi said: “We will now be putting in place steps to establish a standalone, independent business unit to help manage the divestment of these brands.
“The deal requires the approval of the Foreign Investment Review Board (FIRB) and Asahi will continue to work with the regulators towards this.”
In detailing why the watchdog wanted Asahi to divest the brands, ACCC Chair Rod Sims said: “The ACCC was concerned that without the divestments, the proposed acquisition would substantially lessen competition in the cider market and remove a vigorous and effective competitor in the beer market.
“Without the sale of five beer and cider brands including Strongbow and Stella Artois, the combined Asahi-CUB company would have accounted for two thirds of cider sales in Australia, and owned the two largest cider brands, Somersby and Strongbow.
“We determined that Asahi selling the beer and cider brands would be sufficient to address our competition concerns and provide an opportunity for another business to play an important role in a relatively concentrated industry.”
The ACCC also said that while Asahi supplies a relatively small share of beer sales in Australia, there were concerns that the proposed acquisition would have removed a rival capable of competing strongly against the two largest beer brewers, CUB and Lion.
Asahi and CUB currently compete closely in the sale of premium international beers.
The ACCC added: “Asahi has provided a court-enforceable undertaking to the ACCC to divest the five brands. The undertaking also requires Asahi to ensure divested brands get the same access to bars, pubs and clubs as well as off-premise space under tap-tying agreements as Asahi’s brands for the next three years.
“CUB’s parent, AB InBev, has also provided a court-enforceable undertaking to facilitate and not unreasonably withhold consent to the transfer of relevant beer brand rights and obligations to the future buyer or buyers.”
TheShout contacted CUB about the deal, but the brewer said it had no comment at the moment.