Cider Australia; Willie Smith's Cider

Cider industry calls on ACCC to review CUB sale

August 5, 2019
By Alana House

Concern has arisen from an unexpected quarter over Asahi’s deal to buy CUB, with the cider industry demanding the ACCC review the acquisition.

When the $16billion deal was announced last month, there was speculation it would force Asahi to divest some of its beer brands, as it will raise Asahi’s market share in Australia to above 50%.

However, Cider Australia President Sam Reid has spoken out about the the dominant effect the merger will have on the Australian cider market.

The deal will see 70% of the Australian cider category owned by Asahi (according to IRI World data), with Asahi’s expanded portfolio including Somersby, Bulmers, Mercury and Strongbow, as well as craft-style brands such as Pure Blonde, Bonamy’s and the Spring Cider Co.

“It’s about whether these companies can use [their market share] to materially disadvantage the marketplace,” Reid told Brews News.

“What we’re doing as an industry body is to call out this huge, dominant market share and saying to the ACCC ‘perhaps you should look again?’”

The Australian Competition and Consumer Commission is currently investigating the deal.

The Foreign Investment Review Board is also closely examining Asahi’s financing and tax mitigation practices in Australia before it approves the bid.

Tap contract concerns

Additionally, Cider Australia has expressed concern about the effect the deal will have on tap contracts for the cider industry.

Sam Reid, president Cider Australia

Reid (above) told Brews News taps can be “extremely exclusive in what is already a challenging marketplace”.

“Cider just gets wrapped up as a category in tap contracts, a major producer might take 70-90% of available taps and they will definitely take the cider taps, as cider generally becomes an exclusive add-on,” he explained. “That’s how it’s been looked at, hence the lack of innovation in the cider category.”

The ACCC said it will continue to look closely at beer distribution arrangements in Australia.

“The ACCC continues to take an active interest in conduct which raises any competition concerns in beer distribution arrangements, as it does across a wide range of industries across the Australian economy,” the competition watchdog noted last month.

Reid suggested the ACCC consider prohibiting non-price incentives in tap contracts, or even getting rid of tap contracts completely, as they have been in the US.

He wants cider to be recognised by the ACCC as being a separate category to beer.

“With the 100% Australian-grown trust mark we’ve introduced, it’s the right time to call for craft cider to be called out separately.

“Some people think that all cider is cider but we don’t believe it, there’s cider made from apples from Australian farms which are creating jobs and supporting the local economy, and there’s cider made from imported concentrate. They are significantly different,” he concluded.

Cider trust mark a finalist in industry awards

Cider Australia was selected as a finalist in the Food and Beverage Industry Awards 2019 for its world-first ‘100% Australian grown’ cider trust mark.

Cider Australia; 100% Australian grown logo

The trust mark, launched in October 2018, helps consumers to identify ciders made with 100% Australian grown fruit, and has been recognised in the ‘Paddock to Plate’ award category.

The cider industry led trust mark – backed by the Australian Government’s $50 million Export and Regional Wine Support Package – is part of Cider Australia’s campaign to market craft cider overseas and establish export markets for cider brands.

Fifty Australian cider producers have registered to use the trust mark since its launch at the Australian Cider Awards in October 2018.  

Reid said: “Authenticity and transparency around the origin of ingredients are at the heart of the trust mark.

“It’s helping consumers to recognise what makes Australian craft ciders unique – the fact they are made with 100 per cent Australian grown apples or pears.

“It gives producers and orchardists something to unite behind and take to market, and I’m really proud of the work the team and industry have done to get the trust mark off the ground.

“By choosing ciders that display the trust mark, you are supporting Australian fruit growers and their regional communities and boosting Australian jobs in the craft cider industry.”


Share the content

Related Posts