The Australian Competition & Consumer Commission (ACCC) has opposed MicroStar’s proposed acquisition of Konvoy, citing concerns that the sale would lead to a lack of competition in the supply of keg pooling services.
MicroStar – which is operates under the Kegstar name in Australia – and Konvoy are the only suppliers of keg pooling in the country.
Following an investigation, ACCC Commissioner Dr Philip Williams outlined the potential impact to competitive pricing of keg pooling services if the sale were to proceed.
“Our investigation has found that MicroStar acquiring the assets of Konvoy, the only other provider of keg pooling services in Australia, would be likely to substantially lessen competition,” he said in a statement.
“Without competitors, MicroStar could increase prices above a competitive level and reduce services or quality of service for customers. Higher prices for keg pooling would have a significant impact on many independent brewers.”
In March this year Konvoy entered receivership, and administration was appointed to secured creditor EQT Structured Finance Services Pty Ltd.
The receivers determined that a sales process for Konvoy’s assets would provide the best return to creditors, with Kegstar proposing the acquisition of the company’s assets.
Parent company MicroStar is the largest independent keg services company in the United States with operations in the United Kingdom, Europe, Australia and New Zealand.
The company first entered the Australian market in 2021 after acquiring the Kegstar business from Brambles.
The latest announcement comes as the ACCC outlined its preliminary competition concerns in aStatement of Issues in August.
The recent statement of opposition explains that independent brewers have the option to own or lease kegs rather than use pooling services, however the ACCC considers these options to serve a different purpose and “would not be a viable alternative if prices were to increase”.
In the ACCC’s decision it also acknowledged Konvoy’s receivership and that its assets may ultimately be liquidated.
“Our view is that if the proposed acquisition does not proceed, the Konvoy business is likely to continue, whether under new or existing ownership; however, we recognise that liquidation of the assets is also a potential outcome,” said Williams.
“If Konvoy’s assets are liquidated, they would likely remain in the market and be available to new or emerging rivals to MicroStar, or to independent brewers.”
