Megabrew Will Sail past ACCC: Lawyer

John Kettle

Despite media reports to the contrary, Anheuser-Busch InBev’s takeover of SABMiller faces no major regulatory hurdles in the Australian market, according to a leading competition lawyer.

McCullough Robertson partner John Kettle was responding to recent comments by former ACCC Chairman, Professor Allan Fels, that the transaction dubbed ‘Megabrew’ would not get an easy ride past the competition watchdog.

“I actually think he’s the best competition economist in Australia, but I think he was probably caught on the hop on this,” Kettle told beer publication Australian Brews News.

“He may not be fully on top of the brewing game. He’s treating it as a very homogenous, almost single issue market. It’s full of regional submarkets, it’s got different components.”

Kettle is a competition law and merger control expert, who has worked on previous beer industry consolidation events, such as Carlsberg and Heineken’s 2008 takeover of Scottish & Newcastle in the UK, a transaction he said covered a lot of the same issues.

In assessing whether AB InBev’s takeover of SABMiller and therefore Carlton & United Breweries would substantially lessen competition in the Australian beer market, Kettle said the ACCC would ultimately review the implications for several different beer industry segments: brewing capacity, distribution networks, tap beer, bottled beer and craft beer.

“AB InBev doesn’t have any brewing capacity in Australia, so there’s no change there,” he said.

“You still have the Lion distribution network, that’s not disappearing. You still have competing distributors in terms of SABMiller [CUB] and Lion. Where your concern would be is if you had Lion merging with SABMiller, but that’s not happening,” said Kettle.

AB InBev’s tap presence minor
He said the deal would not have any bearing on the issue of access to taps, which has already drawn the attention of the ACCC in the last 12 months.

“That’s a general issue and there’s no change there because you still have two powerful companies,” he said.

He pointed out that most of AB InBev’s brands - which include Corona, Beck’s and Budweiser - are heavily geared to packaged rather than draught beer in Australia.

“Compared to other markets, tap beer isn’t so important in Australia as it would be in a British market or an Irish market,” he said.

“That means it’s actually easier to get access into pubs, because you get access to shelf space rather than taps.”

This is an excerpt of a story that first appeared on Australian Brews News.

Click here to read it in full.

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