By Andy Young
After the Australian Competition and Consumer Commission announced its decision not to oppose AB InBev’s takeover of SABMiller, TheShout spoke to the industry to get its reaction to the news.
In announcing the decision, 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."
He added: "The ACCC considers that the proposed acquisition is unlikely to result in higher beer prices for consumers."
The ACCC also highlighted that it did have concerns regarding the distribution agreements that AB InBev currently has in place with Lion for its brands, but noted that AB InBev has "served notices to terminate agreements with Lion for the distribution of Corona and other AB InBev brands". The termination of these arrangements "resolved the ACCC's competition concerns," Sims said.
Speaking about the news a spokesperson for Lion told TheShout: "In light of the proposed global transaction between ABI and SABMiller, ABI and Lion have begun conversations to plan for the transfer of ABI brands currently distributed by Lion in Australia across to CUB (owned by SABMiller). At this stage no final agreement has been reached on numerous key terms.
"ABI is grateful to Lion for being a long-standing, trusted partner in Australia and growing its brands. Both parties are committed to ensuring a smooth and efficient transition process."
Doug Misener, CEO of the Liquor Marketing Group, told TheShout that it was essentially a "back to the future" scenario.
He added: "CUB understand the brand, parallel availability keeps them honest (effectively a price control mechanism), and the key retail players (CLS, IBA, LMG) will ensure that CUB continue to support the current levels of market investment (promotion, GWP, advertising). So, fair to say that we anticipate a fairly seamless transition."
Scott Towers, a director with Red Bottle, agreed that there was a feeling of déjà vu, but told TheShout: "As an independent retailer we will be watching this takeover closely."
Towers added: "Following the changes since the last SAB merger we share growing concerns about this new arrangement: Reduced representation; Representation replaced with enforcement with this supplier; Reduced deals and ramped up supplier margins.
"These changes offer Asahi a unique opportunity to create a level playing field for their brands across the entire industry."
CEO of the Australian Hotels Association, Stephen Ferguson, said that the AHA "does not have a position in mergers or acquisitions of this nature", while Merivale, whose owner Justin Hemmes explained last month why he doesn't use CUB, did not want to comment on the news.
Kathleen Van Boxelaer, director of external communications with AB InBev, said the company was pleased to hear about the ACCC's ruling.
"We note the ACCC’s decision and are pleased to be able to move forward with our planning for our combination with SABMiller in Australia," Van Boxelaer told TheShout.
"We look forward to the opportunity to engage in the local beer industry and broaden our relationship with the Australian consumer once the combination has completed."
Although the ACCC has given its go-ahead for the proposed takeover, the deal is still subject to shareholder approval and regulatory approvals in certain other markets around the world.