ACCC Not to Oppose the Proposed Acquisition of P&N by Asahi

“This is an excellent outcome for competition in the beverage industry and highlights how businesses can use the ACCC’s processes to address competition concerns and reach a mutually acceptable outcome” chairman Rod Sims said.

Aug 15 2011 --- The Australian Competition and Consumer Commission will not oppose the proposed acquisition of P&N Beverages Australia Pty Ltd by Asahi Holdings (Australia) Pty Ltd after competition concerns were resolved by Asahi providing a court enforceable undertaking to the ACCC.

On 9 March 2011, the ACCC opposed the proposed acquisition of P&N by Asahi after it found that the acquisition would remove P&N as a vigorous and effective competitor in the markets for the supply of carbonated soft drinks (CSDs) and cordial.

To address these competition concerns, Asahi made a revised proposal to acquire P&N and simultaneously divest P&N’s CSD, cordial and energy drink business to
Tru Blu Beverages Pty Ltd (TBB) – a newly created company run by P&N’s current Managing Director, Mr Brooks – while retaining P&N’s bottled water and fruit juice business.

"Taking into account the divestiture and that it will occur simultaneously with the acquisition of P&N, the ACCC is satisfied that the proposed acquisition is unlikely to substantially lessen competition," ACCC Chairman Rod Sims said.

The undertaking obligates Asahi to divest the manufacturing facilities, production equipment, brands, personnel, intellectual property rights and other assets necessary to operate TBB’s CSD, cordial and energy drink business. Asahi is also required to transfer certain production lines from Schweppes to TBB and provide interim contract packing services to TBB.

The ACCC was satisfied that the undertaking would remedy its competition concerns and ensure that TBB is in a position to be an ongoing viable and effective independent competitor in the CSD and cordial markets.

“This is an excellent outcome for competition in the beverage industry and highlights how businesses can use the ACCC’s processes to address competition concerns and reach a mutually acceptable outcome” chairman Rod Sims said.

The ACCC considered that TBB, under the ownership of Mr Brooks, would remain a vigorous and effective competitor for the supply of CSDs and cordial in the foreseeable future.

“The CSD and cordial products that are produced by P&N play an important role in providing Australians with a competitive alternative to the relevant products produced by Schweppes and Coca-Cola Amatil,” Mr Sims said.

Asahi owns Schweppes Australia Pty Ltd, the second largest manufacturer of CSDs and the largest manufacturer of cordial in Australia.

P&N, a privately owned company, is the third largest manufacturer of both CSDs and cordial. P&N manufactures CSDs under a number of brands and is the largest supplier of private label CSDs in Australia.