Asahi may have to trim its assets

The run of asset sales in the beer industry may not be coming to an end any time soon — some are predicting Asahi will be forced to sell assets and beverage brands by the competition watchdog following its $16 billion acquisition last week of Carlton & United Breweries.

As revealed by DataRoom last week, Asahi has been in talks to buy Carlton & United Breweries (CUB) since April and finally secured control of the Australian beverages portfolio when a deal was reached on Friday.

However, the problem now for Asahi will be that it will control well over 50 per cent of the Australian beer market, which could mean that it is forced by the Australian Competition and Consumer Commission to sell assets.

Beer brands owned by Asahi in Australia include Peroni, Grolsch and Pilsner Urquell that it purchased from Anheuser-Busch InBev before it acquired the Carlton business from the Belgium brewer.

It also has Asahi, Cricketers Arms, Estrella Damm, Mountain Goat, Kingfisher Premium, which is imported, and NZ Pure.

CUB beer brands include Pure Blonde, Great Northern, Corona, Crown, Carlton Draught, Victoria Bitter and Melbourne Bitter, along with Goose Island, Wild Yak, Pirate Life and 4 Pines Brewing.

The pair also have an overlap with cider brands so they could be also targeted by the ACCC in terms of being made to undertake divestments.

At one point, Victoria Bitter alone had about 25 per cent of the beer market share in Australia, which offers Asahi distribution power when it comes to selling its beverages into pubs, although it is likely now to be far less.

With such market dominance, the group could have the power to place pressure on publicans to replace its Coca Cola soft drink supplies with those from its own Schweppes portfolio.

Should divestments be made, some believe that the group could sell some of its craft beer and one view is that Cricketer’s Arms could be on the block.

If approved by the ACCC and Foreign Investment Review Board, Asahi’s acquisition will mean Japan controls Australia’s two biggest brewers, CUB and Lion, which is owned by Kirin, while Asahi will emerge as the third-largest global brewer with more than two-thirds of its earnings coming from outside Japan.

Asahi, with its base in Melbourne and a history stretching back to 1903, was owned by Foster’s up until 2011, when it was sold to SABMiller for $11bn. Later, it was folded into a $US100bn mega-merger with Anheuser-Busch InBev to create the biggest brewer in the world.