The Australian Competition and Consumer Commission will not oppose the proposed acquisition of Southcorp by Foster's, ACCC Chairman, Mr Graeme Samuel, said today.
Foster's and Southcorp are two of the largest producers of alcoholic beverages in Australia. Foster's has extensive brewing interests, as well as a portfolio of wine brands including Wolf Blass, Jamieson's Run and Annie's Lane. Southcorp is one of the largest wine producers in Australia, with a range of prominent brands including Penfolds, Rosemount and Lindemans.
"The proposed acquisition will result in Foster's becoming the second largest producer of wine in Australia in terms of volume, and the largest in terms of value", Mr Samuel said. "However the proposed acquisition will not cross any of the market share thresholds or concentration ratios found in the Merger Guidelines".
Should the acquisition proceed, there will still be a number of large wine producers that will constrain the behaviour of Foster's. These producers include Hardy Wines, Orlando Wyndham, and McGuigan Simeon.
The ACCC also noted the strength of the retail chains and liquor buying groups, which were likely to constrain Foster's after the acquisition.
"Accordingly, the ACCC formed the view that the proposed acquisition is unlikely to substantially lessen competition".
A statement of reasons for the decision will be published on the Public Competition Assessments page on the ACCC website shortly.