Industry responds to Asahi's $16bn CUB acquisition
The industry has largely welcomed the decision by the ACCC this morning to approve the acquisition of Carlton & United Breweries by Asahi.
The Australian Competition & Consumer Commission this morning announced that it had approved the $16 billion acquisition following promises by Asahi that it would divest three of its cider brands and two of its beer brands.
Strongbow, Bonamy’s and Little Green Cider, as well as Stella Artois and Beck’s are to be offloaded by the Japanese-owned company.
Asahi said it welcomed today’s announcement that the ACCC would not be opposing the acquisition.
“We will now be putting in place steps to establish a standalone, independent business unit to help manage the divestment of these brands,” a spokesperson for Asahi said.
The deal still requires the approval of the Foreign Investment Review Board (FIRB) and Asahi said it will continue to work with the regulators towards this.
However it is unclear when the board will be able to consider the case, following an announcement at the end of last month from the federal government that it will now take up to six months – compared to 30 days previously -to consider each deal.
The government explained that measures have been put in place to “safeguard the national interest as the coronavirus outbreak puts intense pressure on the Australian economy and Australian businesses.”
The government did say it would prioritise applications for investments that protect and support Australian business and Australian jobs.
Cider Australia has been vocal about the process. Concerns about competition in the cider market were part of the reason that the ACCC decided to investigate the deal back in December 2019.
A combined Asahi-CUB company would control the Somersby, Strongbow, Mercury and Bulmers cider brands, which account for about two thirds of cider sales, it said at the time.
Sam Reid of Cider Australia however said that now that Asahi had agreed to divest a number of cider and beer brands to appease the regulator, it was a “great outcome” for the cider industry, which has also been recognised as its own distinct category rather than a subset under beer or other beverages.
“We’re hoping this could lead to an increase in innovation in the category, with potentially the original brand owner of Strongbow, Heineken entering the Australian market in a bigger way,” Reid said.
“They are the largest cider producer in the world and have a portfolio of great brands and a strong culture of innovation.”
The divestment of its cider brands will now bring the cider market share of the combined group to under 50 per cent.
The Independent Brewers Association has been contacted for their reaction but did not have a statement at the time of publication. It has subsequently provided a full statement.