The Australian Competition and Consumer Commission (ACCC) says it will not oppose the proposed acquisition of SABMiller by Anheuser-Busch InBev (AB InBev).

 Belgium’s AB InBev is the world’s largest brewer and in October 2015 it proposed a takeover of South Africa-originated SABMiller, the world’s second-largest brewer. The acquisition is expected to cost AB InBev US $ 108 billion.

Within Australia, AB In Bev owns rights to Corona, Stella Artosis, Beck’s and Budweiser beer. It however does not operate any breweries within Australia and has been using Lion as its main distributor.

SABMiller acquired Fosters Group Limited, including Carlton United Breweries (CUB), in 2011 and has since controlled the licensing rights to use the brands Victoria Bitter, Carlton, Crown Larger, Pure Blonde and Strongbow Cider.

ACCC Chairman, Rod Sims, said the ACCC concluded that the proposed acquisition is not likely to substantially lessen competition in the Australian beer market.

“The ACCC found that the proposed acquisition would not significantly change the current market structure,” Sims said.

“The two largest suppliers of beer in Australia are Lion and SABMiller, which owns Carlton & United Breweries (CUB). While AB InBev’s brands have been successful in Australia, particularly Corona, they have previously been distributed via either Lion or CUB. AB InBev has only a limited direct company presence in Australia and does not brew beer here,” Sims stated.

“The ACCC considers that the proposed acquisition is unlikely to result in higher beer prices for consumers,” Sims said.

The ACCC said it held concerns that if AB InBev continued to use Lion as a distributor, the acquisition may have increase the ability and incentive for coordination between Lion and AB InBev/SABMiller. Lion has however been served notice it will no longer be a distributor and AB InBev/SABMiller will take over the role directly.

“The termination of the distribution arrangements therefore resolved the ACCC’s competition concerns,” Sims said.

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