Craft brewers warn of 'bundling' power of Asahi and CUB
Australia's 600-plus small craft beer companies are preparing to make fresh submissions to the competition regulator warning about the clout which comes from ''bundling'' if the $16 billion merger between Asahi and Carlton & United Breweries goes ahead.
Independent Breweries Association chairman Jamie Cook said that while the Australian Competition and Consumer Commission had raised some issues in both the cider and beer market in its ruling last week, more attention needs to be paid to the market power of a combined Asahi-CUB in the pubs and bars segment.
"We still have concerns with the bundling potential that comes with an enlarged player, particularly in the on-premise trade,'' Mr Cook said on Thursday.
The IBA, which represents the interests of 600 craft brewers, would be putting in a fresh submission before the January 22 deadline set by the ACCC last week after the regulator delayed a decision on the proposed Asahi-CUB merger until late March.
Mr Cook said the clout which stemmed from having a much bigger suite of products across beer brands, cider and soft drinks by a combined Asahi-CUB shouldn't be under-estimated.
The IBA has also permanently barred craft beer group Balter Brewing Co from being a member of the organisation after it was acquired in early December by CUB.
Surf's up
CUB bought the Gold Coast-based Balter Brewing Co from founders including surfing champions Mick Fanning and Joel Parkinson. Balter was established in 2016 and has been one of the fastest-growing brands in an increasingly crowded craft beer segment,
Mr Fanning is a three-time world surfing champion and became even more famous outside his sport in 2015 when he fought off a shark while competing in a surfing competition at Jeffreys Bay off the coast of South Africa. The television broadcast footage of Mr Fanning punching the shark was viewed by hundreds of millions of people around the world.
"None of the smaller brewers have any of that,'' Mr Cook said.
Mr Cook, one of the co-founders of Byron Bay craft brewery Stone & Wood, said under the rules of the IBA, craft brewers acquired by large conglomerates were excluded from the organisation because of the vast resources they now had access to.
Balter Brewing Co is now in the same category as other excluded craft brewers which have been scooped up by the big players, including Pirate Life and 4Pines, both acquired by CUB in 2017.
The same fate has befallen Queensland's Green Beacon, acquired by Asahi in August this year.
Cider heartburn
The ACCC on December 12 delayed a decision on the proposed buyout by Asahi of CUB until March 19, as chairman Rod Sims said the competition regulator had formed a preliminary view that it would reduce competition in the market for cider, and may also reduce competition in the beer market.
"A combined Asahi-CUB would control the Somersby, Strongbow, Mercury and Bulmers cider brands, which account for about two-thirds of cider sales,'' Mr Sims said.
It believes that having Asahi as an independent player in the beer market, where it competes with the much larger CUB and its main rival Lion, also helps keep beer prices down.
Both Asahi and CUB's current owner ABInbev said on December 12 they would work closely with the ACCC on resolving the issues – which industry analysts took as code that they would embark on divestments in both cider and beer to satisfy the regulator to get the deal over the line.
Asahi’s beer brands include Asahi Super Dry, Peroni, Mountain Goat, Cricketers Arms and the new Two Suns brand.
CUB owns mainstream beer brands Victoria Bitter, Carlton Draught and Great Northern. It also makes Crown Lager and Pure Blonde, and with the addition of Asahi's brands will have more than half of the $14 billion beer market.
The ACCC said a merged Asahi and CUB would have 66 per cent of the cider market.
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