The Australian Competition and Consumer Commission will not oppose the acquisition of Coopers Brewery Limited by Lion Nathan Limited, ACCC Chairman, Mr Graeme Samuel, said today.

"While the ACCC recognised that Coopers' market share is growing, including outside of South Australia, its market share remains small, and substantially smaller than the two major beer producers in Australia, CUB and Lion Nathan", Mr Samuel said.

On 16 November 2005, the ACCC published a Statement of Issues which sought further information on two outstanding issues: (i) the extent to which Coopers influences the pricing, product development and marketing of, in particular, CUB and Lion Nathan; and (ii) whether the removal of the Coopers distribution network would raise barriers to entry.

"The evidence received in response to the Statement of Issues suggested that most competitive tension in the beer market is generated by competition between Lion Nathan and CUB", Mr Samuel said.

"The evidence also suggested that the removal of Coopers as an independent beer wholesaler also would be unlikely to raise substantial competition concerns. While Coopers provides sales and marketing services, it relies on the existing independent wholesale distribution network to physically distribute beer products. This network will remain in place following the acquisition. In the national beer market, Coopers only distributes a small percentage.

"Accordingly, the ACCC considered that Lion Nathan's proposed acquisition of Coopers is unlikely to result in a substantial lessening of competition".

The ACCC concluded that the relevant market was broader than South Australia, the only state where Coopers has a substantial market share. Beer supplied from other states constitutes a significant proportion of beer sold in South Australia.

During its investigation of the proposed acquisition, the ACCC consulted widely in the beer industry, including with competitors, customers, suppliers and distributors.

The ACCC brought forward its decision on the proposed acquisition so that Coopers shareholders could know the ACCC's decision prior to the Coopers Extraordinary General Meeting scheduled to be held on Wednesday (7 December 2005).

"The ACCC's consideration of this acquisition highlights the flexibility of the Informal Merger Review process and demonstrates how timing can be adapted to meet the commercial imperatives of not just the merger parties but also shareholders", Mr Samuel said.

A Public Competition Assessment in relation to this acquisition will be issued in due course. It will be available on the ACCC's website, under mergers.