Asahi Beverages (Asahi) has welcomed the decision of the Australian Competition and Consumer Commission (ACCC), which will not oppose Asahi’s proposed acquisition of Carlton & United Breweries (CUB).

The decision depends, however, on Asahi having agreed to divest two of its beer brands – Stella Artois and Beck’s – and three of its cider brands – Strongbow, Bonamy’s and Little Green.

Asahi has provided a court-enforceable undertaking to the ACCC to divest the five brands. Asahi are also required to ensure that the divested brands will 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.

“We will now be putting in place steps to establish a standalone, independent business unit to help manage the divestment of these brands,” says a spokesperson for Asahi. “The deal requires the approval of the Foreign Investment Revire Board and Asahi will continue to work with the regulators towards this.”

By selling on these brands, the ACCC believes that Asahi will be able to acquire CUB without having too large a stake in the Australian beer and cider markets. Without the divestments, Asahi-CUB would have accounted for two thirds of cider sales in Australia, a share with which the ACCC was not comfortable.

The ACCC explained that while Asahi currently supplies a relatively small share of beer sales in Australia, the proposed acquisition – without the divestment of brands – 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 future buyer or buyers of these assets has not yet been announced and will also need to be approved by the ACCC.

“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,” ACCC chair Rod Sims said.

“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.”

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.

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