The ACCC has cleared the way for Lion’s acquisition of Fermentum, advising that it does not consider the acquisition a threat to the independent craft beer market in Australia.
ACCC Commissioner Stephen Ridgeway said the organisation was concerned that the brewing giant’s acquisition of the Byron Bay brewery would remove “a large popular independent craft brewer that has plans to expand its capacity and potentially compete more aggressively against the two major brewers in Australia, being Lion and Asahi/Carlton & United Breweries”.
Its review honed in on the question as to whether the acquisition would substantially lessen competition in the supply of beer, given Fermentum’s popular flagship brand Stone & Wood.
It concluded that “a wide range of alternative independent craft beers will remain available in the market even if the transaction goes through”.
The ACCC also concluded that overall, the Fermentum brands do not compete closely with Lion’s products, as Fermentum’s brands sit in a different tier and Lion’s craft-style brands are generally perceived as closer to the mainstream.
Consultation with customers, competitors and industry bodies was part of the process as the ACCC considered whether the proposed acquisition would stop the growth of independent brewers, or restrict their ability to access beer taps in hospitality venues or take shelf space at liquor stores.
“Consumer demand for independent beer has grown significantly over the last five years, and this has helped independents grow their presence at hotels, clubs and retailers,” Mr Ridgeway said.
“We also know from speaking to a wide range of venues, particularly those in metropolitan areas, that they typically reserve one or two taps for independent brands.”
The ACCC understands that Stone & Wood would no longer be eligible for the taps reserved for independent brewers after the acquisition. Therefore, it is likely other independent brewers will be able to take up many of the taps that were previously Stone & Wood independent taps.
During the investigation, a number of market participants raised concerns that the packaging of beer made by the major breweries may confuse consumers about who ultimately owns the company that made the beer.
“Consumers that wish to purchase independent craft beer should carefully read the information provided on the label, or ask the person serving them if the beer is made by an independent brewer,” Mr Ridgeway said.
