SABMiller free to acquire Foster’s
The Australian Competition and Consumer Commission yesterday announced that it will not oppose the acquisition of the iconic Australian Foster’s Group by SABMiller.
According to ACCC chairman Rod Sims “the proposed acquisition is not likely to result in a substantial lessening of competition for the supply of beer”.
Before reaching this conclusion, the ACCC carried out a comprehensive review, involving market inquiries with a range of interested parties in the beer industry.
UK company SABMiller currently operates in Australia through Pacific Beverages, a joint venture with Coca-Cola Amatil.
After the proposed acquisition, SABMiller and Coca-Cola Amatil intend to terminate the joint venture so that SABMiller will wholly own both Foster’s and Pacific Beverages.
The ACCC considers that the removal of Pacific Beverages as an independent beer producer and supplier would be unlikely to raise substantial competition concerns.
Mr Sims said “the evidence suggests that Pacific Beverages is not a significant force in the Australian beer market and other competitive constraints will continue to operate on a merged SABMiller/Foster’s”.
Post acquisition, the merged firm will continue to face competition from Lion Nathan, the second largest player in the Australian beer market. Competition from smaller beer suppliers, such as Coopers and micro breweries, parallel imports and control brands supplied by the major supermarkets will also constrain the merged firm.
Foster’s board of directors accepted SABMiller’s takeover bid on 21 September 2011.