Cider market at competition risk in Asahi – CUB merger
5 Aug 2019
Industry body Cider Australia is calling on the ACCC to separately consider the cider category when reviewing the proposed acquisition of Carlton & United Breweries by Asahi Beverages.
Asahi and AB InBev-owned CUB announced the deal on 19 July. The ACCC will now consider whether the proposed merger should go ahead based on whether is likely to substantially lessen competition in the alcoholic beverage market.
Cider Australia president Sam Reid said the industry is concerned about the possible impact of the merger on the cider category because a combined Asahi/AB InBev business would control around 70 per cent of the category by volume share1.
“Unlike beer where different sub-segments of the category – such as Pale Ale, IPA and Sour Beers – are well established, tap contracts for cider tend to cover the entire category”, said Mr Reid.
“Such a significant consolidation in brand ownership is likely to further limit competition and innovation in the cider category to a far greater extent than in beer.
“We encourage the ACCC to independently consider the competitive landscape for cider, including to re-consider the impacts of tap contracts given they can completely lock out new and emerging products.
“It may be time to consider prohibiting non-price incentives in tap contracts, or even getting rid of tap contracts completely.
“With the advent of Cider Australia’s 100% Australian Grown trust mark, a level playing field for smaller cider producers and Australian apple and pear growers is as important as ever”, Mr Reid said.
1. Source: IRI/Market Edge
About Cider Australia
Cider Australia is an independent, not-for-profit organisation funded by cider businesses and sponsors, established in 2012. It aims to build a sustainable cider category by undertaking activities that improve the quality of ciders produced and marketed in Australia. The organisation represents the interests of the cider industry to policy makers, calling for regulations and policies that support a diverse and evolving cider industry, and runs the national cider conference and the Australian Cider Awards.
Australian Craft Cider Definition
Cider Australia launched the 100% AUSTRALIAN GROWN trust mark in October 2018, becoming the first country in the world to have a trust mark that promotes the authenticity of cider and drives integrity in the market. The trust mark is industry-led and can be displayed only on Australian craft ciders. Under our definition, ‘Australian craft ciders’ are ciders that contain Australian grown ingredients, and that have a minimum juice content of 50% (by weight of finished product). The trust mark addresses significant failings in the current definition of cider in Australia which is the absence of both a minimum juice content in cider, and a requirement to identify the country of origin of the juice.
To interview Cider Australia spokespeople please contact Cider Australia executive officer Jane Anderson on 0434 559 759 or firstname.lastname@example.org.