Asahi offers to sell some brands to appease regulator
Australia | What is taking the regulator so long to vet Asahi’s purchase of CUB? In an effort to speed things up, Asahi has now proposed to ditch some brands.
On 28 February 2020, Asahi told the ACCC, Australia’s competition watchdog, that it will divest a number of cider and beer brands, if its AUD 16 billion (USD 11 billion) purchase of CUB is allowed to go ahead. In July 2019, AB-InBev agreed to sell the country’s major brewer Carlton & United (CUB) to Asahi.
Annoyed with the long wait, the Japanese firm submitted a proposal to sell its Strongbow, Bonamy’s and Little Green cider brands, as well as the licences to Stella Artois and Becks, to purchasers approved by the ACCC.
Per brewsnews.com.au, the cider brands it is proposing to sell equate to 20 percent of the Australian cider market – with Heineken-owned Strongbow at 18 percent. However, Asahi will only sell the brands if the ACCC agrees to the CUB acquisition.
The beer brands Stella Artois and Beck’s came into CUB’s possession in 2016, after AB-InBev bought SABMiller and wanted its brands back from Lion, which had held the licences previously.
More consultation needed
The ACCC is now seeking feedback from industry participants, on whether Asahi’s divestment package will be sufficient to address the competition concerns. Parties wishing to make a submission should do so by 18 March 2020.
The watchdog raised concerns about the deal in December last year, saying it would result in significant consolidation of the cider market, and a reduction of competition in the beer market.
It explained that while Asahi has a low market share, it appears to be a “vigorous competitor” to the two major beer suppliers, Kirin-owned Lion and AB InBev-owned CUB, which would be removed if the acquisition proceeds.
