Heineken to buy Asahi sell-off brands

Australia | When Asahi proposed to acquire market leader Carlton & United Breweries (CUB) from AB-InBev in 2019 for USD 11 billion, the regulator would only approve of the deal, if Asahi divests two of its beer brands and three of its cider brands.

The brands to be sold are the Strongbow, Bonamy’s and Little Green cider brands and the Stella Artois and Beck’s beer brands. In April this year, the regulator, ACCC, finally ruled that without the sale of two beer and three cider brands, 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. This was not to be.

On 28 October 2020 Asahi announced the sale of the brands to Heineken.
In a statement, Asahi said that the disposal will fulfil Asahi’s obligations under the watchdog’s ruling. There will be no manufacturing job losses nor brewery closures associated with this deal, Asahi added.

Analysts estimate that the beer and cider assets have a revenue of AUD 150 million to AUD 170 million (USD 120 million) and a pre-tax profit of AUD 40 million to AUD 65 million (USD 46 million).

The website brewsnews.com.au pointed out that the deal highlights the complicated nature of international brand ownership.

Heineken is in a joint venture with brewer Lion in the Australian market, while the brands covered by the deal will be distributed in Australia by Drinkworks, the Australian sales and marketing arm of DB Breweries, Heineken’s wholly-owned Australasian subsidiary.

Lion signed a long-term licencing deal with Heineken in 2017 to produce and sell its eponymous beer in Australia. The brand had previously been managed by a joint venture, Heineken Lion Australia.

What the deal means for Heineken in Australia is yet to be known. One thing is sure. It reunites Strongbow cider with its parent as Heineken owns the brand in the rest of the world.