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Competition commission raises cider concerns over Asahi's Australian expansion

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Australia's competition watchdogs have warned that Asahi's takeover of Anheuser-Busch InBev's operations in the country will put two-thirds of the cider market in the hands of just one company.

Asahi is set to buy Carlton & United Breweries next year

Asahi is set to buy Carlton & United Breweries next year

The Australian Competition & Consumer Commission (ACCC) said in a preliminary view on the proposed purchase of Carlton & United Breweries (CUB) that it would give Asahi control of the Somersby, Strongbow, Mercury and Bulmers brands, which account for the bulk of cider sales in Australia. The commission said the deal could lead to higher cider prices.

"The proposed acquisition would combine the two largest suppliers of cider in a highly concentrated market," ACCC chairperson Rod Sims said.

The commission also warned the deal would mean Australia losses Asahi - which controls about 4% of the country's beer sales - as a "competitive restraint" on larger brewers Lion and CUB.

"Our preliminary view is that having Asahi in the market as a competitor to the big two brewers may help to keep a lid on beer prices," Sims said. "This competitive presence, and the threat of Asahi growing more in the future, would be lost if this deal goes ahead."

On the cider issue, the commission said Asahi argued that the cider and beer markets in Australia should be viewed as one.

"But our preliminary view is that cider is a separate market and drinkers do not readily switch between beer and cider," Sims said.
The ACCC has invited submissions from interested parties by 22 January. The commission's final decision is scheduled for 19 March.

Asahi agreed earlier this year to buy CUB from A-B InBev for US$11.3bn.

Asahi lines up Australian domination at a price that's right - Click here for a just-drinks analysis


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