ACCC won't fight Lion acquisition of Fermentum

The Australian Competition and Consumer Commission (ACCC) has signalled that it will not be fighting Lion’s proposed acquisition of Australian brewing company Fermentum.

Lion, owned by the Japanese company Kirin, announced that it would be acquiring Fermentum in September. The ACCC subsequently launched an informal investigation into the acquisition out of concern that it would substantially reduce the competition in the supply of beer, especially that of craft and independent beers.

The conclusions of the investigations allay these fears, however, finding that Lion and Fermentum’s target markets do not overlap, with Fermentum’s primary brand Stone & Wood presenting a more upmarket and expensive product than the craft-style beers produced by Lion currently, which are more mainstream.

There were also worries about Fermentum’s products being eligible to be served from independent beer taps, despite being owned by a large company, but this will not be the case, and in fact, other, smaller brewers will now be able to take the place of the company’s beers.

Finally, concerns had been raised by market participants that Fermentum’s beer packaging would not accurately reflect that it was no longer an independent brewer, to which the ACCC’s response was for consumers to carefully peruse the packages of beverages they are buying.

The ACCC has previously expressed some consternation about the acquisitions of small breweries by larger companies, and how beer taps can be accessed by these larger companies. It notes that it will continue to monitor further acquisitions of this kind in the future.

If you are interested in seeing the results of the investigation yourself, they can be viewed here.

Image credit: ©stock.adobe.com/au/New Africa