By Andy Young, The Shout
The Australian Competition and Consumer Commission (ACCC) has written to interested parties seeking submissions and views on Asahi’s proposed acquisition of Carlton & United Breweries (CUB).
The proposed deal, which was announced last month, has attracted the attention of the competition regulator, which will now investigate the impact on the competitive landscape and on prices.
In a letter to interested parties, the ACCC said: “The ACCC’s investigation is focused on the impact on competition.
“In particular we are seeking your views on: whether Asahi and CUB compete closely for the supply of beer, cider and spirits products · the likely impact on prices · the extent to which large customers, such as supermarket chains, hotel groups or distributors, could sponsor entry or expansion by a rival supplier if the proposed acquisition were to result in a price increase.”
The legal test which the ACCC applies in considering the proposed acquisition is in section 50 of the Competition and Consumer Act 2010. Section 50 prohibits acquisitions that are likely to have the effect of substantially lessening competition in a market.
The ACCC’s investigation is public so anyone interested in the deal is able to make a submission. The regulator has set a tight deadline of 5pm on 6 September 2019 for its responses. Responses may be emailed to firstname.lastname@example.org with the title: Submission re: Asahi CUB – attention Asa Tan / Stella Leung.
Other matters which the ACCC says can be addressed in submissions include:
- Is cider a separate market, or is it in the same market as beer or other ready to drink alcoholic beverages? For example, do you consider that the pricing of cider is constrained by the availability of other alcoholic beverages in Australia?
- Currently Asahi is much smaller than CUB and Lion in terms of beer sales in Australia. How likely is it that Asahi will significantly expand sales in Australia in the future if the acquisition of CUB does not proceed?
- How closely do brands owned by the major supermarket chains compete with Asahi and CUB in the relevant market(s)? Do you consider that these brands would provide an effective competitive constraint on a combined Asahi/CUB?
Cider Australia has already detailed its concerns that the proposed deal would put Australia’s cider market at risk.
The letter which the ACCC has sent out and the full details regarding how to make a submission and on what matters is available on the ACCC website.
Last month Asahi Australia’s Executive Chairman, Peter Margin, told TheShout that the company would work through the process with the ACCC and address any concerns as they arise. He added: “We are confident we can work with them to reach a satisfactory position.”