Concentrated cider market leaves ACCC with a headache as it mulls $16b CUB takeover

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ACCC finds Asahi's takeover of CUB hard to stomach as it would lead to an even more concentrated beer and cider market which could take the lid off prices.

The proposed $16 billion takeover of Carlton & United Breweries by Japanese beer giant Asahi looks in danger of going flat with the competition regulator raising concerns about the deal.Asahi's proposed takeover of CUB would combine the two biggest cider makers with about two-thirds of the marketThe ACCC will make its final determination on the deal in March next year

In its preliminary examination, the Australian Competition and Consumer Commission tilted towards the interests of drinkers in the transaction arguing it had the potential to dry up competition and raise prices, particularly for those who enjoyed a cider or two. "The proposed acquisition would combine the two largest suppliers of cider in a highly concentrated market," ACCC chair Rod Sims said.

"A combined Asahi-CUB would control the Somersby, Strongbow, Mercury and Bulmers cider brands, which account for about two-thirds of cider sales.The ACCC also raised concerns about competition in the already very concentrated Australian beer market. "While Asahi is currently a relatively small brewer in Australia, accounting for approximately 3.5 per cent of beer sales here, our preliminary view is that Asahi may act as a competitive constraint on the two largest beer brewers, CUB and Lion, and has the potential to be an even bigger threat in future," Mr Sims said.

 

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Concentrated cider? That would get you drunk exceptional quickly I suppose.

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