The Australian Competition and Consumer Commission (ACCC) has raised competition concerns over Asahi Group Holdings’ proposed acquisition of Carlton & United Breweries (CUB).

CUB is a subsidiary of Belgium-headquartered Anheuser-Busch InBev (AB InBev). Headquartered in Victoria, Australia, CUB produces beers, ciders and spirits brands.

Asahi is a Japanese firm engaged in the production and distribution of alcoholic beverages, soft drinks and food products in Japan and overseas markets. In Australia, Asahi manufactures and supplies a wide range of beer, cider and spirits brands.

ACCC said that the proposed acquisition would lower the competition for cider and beer in the market.

Before raising its concerns, ACCC carried out consultations with several market participants, including licensed venues, alcohol retailers, competitors and industry groups.

Many have expressed concerns about the proposed deal, noted the regulator.

ACCC Chair Rod Sims said: “The proposed acquisition would combine the two largest suppliers of cider in a highly concentrated market.

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“A combined Asahi-CUB would control the Somersby, Strongbow, Mercury and Bulmers cider brands, which account for about two-thirds of cider sales. We are concerned that the proposed acquisition may lead to higher cider prices.

“Our preliminary view is that having Asahi in the market as a competitor to the big two brewers may help to keep a lid on beer prices. This competitive presence and the threat of Asahi growing more in the future would be lost if this deal goes ahead.”

In July, AB InBev agreed to sell its Australian subsidiary CUB for an enterprise value of A$16bn ($11.3bn) to Asahi Group Holdings.

Under the deal, Asahi will hold all the rights to commercialise the portfolio of AB InBev’s global and international brands in Australia.