Stella Artois Australian Open

Asahi Beverages to sell five cider & beer brands

February 28, 2020
By Alana House

Asahi Beverages has offered to divest its cider business and two beer brands in its quest to gain ACCC approval for its acquisition of CUB.

The cider brands – Strongbow, Bonamy’s and Little Green – equate to about 20% of the Australian cider market, with Strongbow being about 18%. The beer brands – Stella Artois and Beck’s – are established premium international beer brands.

The ACCC is seeking views on the divestment undertaking, with submissions due on March 18.

Asahi’s proposed undertaking seeks to address the competition concerns identified by the ACCC in its statement of issues published on 12 December 2019, which raised preliminary competition concerns in relation to cider and beer.

The proposed divestment undertaking would require the purchaser(s) to be approved by the ACCC. 

“The release of the proposed divestment undertaking for public comment should not be interpreted as a signal that the ACCC will ultimately accept the undertaking and clear the transaction,” ACCC Chair Rod Sims said.

“We are following our usual practice of publicly consulting on a proposed divestment package.

“We are seeking feedback from industry participants on whether the divestment package will be sufficient to address the competition concerns.”

In December 2019 the ACCC detailed how the acquisition would result in significant consolidation of cider brands. The ACCC considers that Asahi and CUB’s cider brands compete closely with each other.

In relation to beer, the ACCC noted that Asahi, while having a low market share, appears to be a vigorous competitor to the two major beer suppliers, and this competition will be removed if the acquisition proceeds.

The ACCC now seeks views from market participants on whether the proposed undertaking would be likely to alleviate its competition concerns. Parties wishing to make a submission should do so by 18 March 2020.

Asahi Beverages said it welcomes today’s announcement by the ACCC.

The company said in a statement that it “has been working closely with the ACCC and has proposed undertakings to address the preliminary concerns the ACCC raised in December in relation to this acquisition”.

Strongbow; Asahi Beverages

“Many of these brands are well known brands and Asahi Beverages believes that they would attract strong interest from suitable buyers who wish to compete in beer and cider,” Asahi said.

Asahi Beverages Chairman Peter Margin said: “We understand and respect that the ACCC must undertake a thorough process to ensure that the deal does not reduce competition and is in the interests of consumers.

“Asahi’s acquisition of CUB is a significant one and we have always expected that the review process would take some time.

“We are working towards completing the deal as soon as possible once we have received regulatory approvals from both the ACCC and the Foreign Investment Review Board.”

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