E-Malt.com News article: Australia: Asahi’s takeover of CUB could help revive beer sales in Australia

The A$16 billion takeover of Carlton & United Breweries by Japan's Asahi could help revive beer sales in Australia after a multi-year slump, industry executives say, as the competition regulator confirmed it would investigate the blockbuster deal, The Sydney Morning Herald reported.

Carlton & United Breweries (CUB), the maker of some of the country's biggest and best-known beers including Carlton Draught, Victoria Bitter, Great Northern and Pure Blonde, was sold by its former multinational parent company Anheuser Busch InBev in a landmark transaction announced on July 19.

In his first public comments since the deal was announced, CUB chief Peter Filipovic on July 21 said his company, which runs the Abbotsford brewery, Hobart's Cascade brewery and Yatala brewery near Brisbane, would benefit from the tie-up. "We look forward to growing the business and the beer category with Asahi," he said.

"Not only will we continue to brew our famous beers such as VB and Carlton Draught in Australia, but we'll join a company that has fantastic beers such as Asahi and Peroni."

The proposed tie-up of Asahi and CUB will trigger a review by the Australian Competition and Consumer Commission scrutinising the amount of market share the combined company would control.

The ACCC said it had been notified of the proposed transaction and would begin a public review once it received a submission.

"Because it’s a A$16 billion acquisition, they will give it quite a good look," said McCullough Robertson partner John Kettle, a competition lawyer with experience in international beer industry consolidation. "It’s a lot of money in a market in which beer drinking may have topped out, but people obviously still see enough yield in it."

But Mr Kettle said he believed the proposal was unlikely to face regulatory hurdles due to the market share of Lion and the strength of the country's craft beer market.

Tim Cooper, the managing director of Australia's largest independent family-owned brewery, Coopers, said the Asahi deal would be beneficial to the broader national beer market.

"Japanese companies by and large take a long-term view," he said, "and we believe Asahi will look to invest for the long term."

Mr Cooper said he believed Asahi would invest in its brands through capital expenditure, sales and marketing instead of the "short-term, transactional" operating model he said had been the approach of CUB parent AB InBev, which had included aggressive discounts. He said Coopers' sales dropped 11 per cent last month, as CUB slashed prices.

CUB is Australia's biggest brewer with nearly 50 per cent market share. Its closest competitor, Lion, owned by Japan's Kirin Holdings, has about 40 per cent.

The proposed sale of CUB, was announced by Anheuser Busch InBev to the Belgian stock exchange on July 19. The multinational brewer has previously flagged plans to float its Asian assets. The sale of CUB to Asahi will also require approval from the Foreign Investment Review Board.

It comes as the popularity of mass-produced beer brands continues to plunge in Australia and around the world. The trend has been attributed to consumers' rising health consciousness, preferences for more complex craft beers and take-up of other alcoholic drinks such as cider, wine and spirits.

The Australian Bureau of Statistics' latest figures show that overall alcohol consumption among people over the age of 15 has continued on a downward trend that began in 2010 and, in 2016-17, reached a 55-year low.


23 July, 2019