Lion takeover of Stone & Wood would ‘free up’ taps for independent brewers, ACCC says

The nation's competition watchdog has approved Japanese liquor giant Lion's proposed acquisition of independent brewer Fermentum, owner of Byron Bay-based Stone & Wood.

Key points:The nation's competition regulator approves Lion's proposed acquisition of FermentumThe ACCC says the sale won't substantially lessen competition in the supply of beerThe bid by the Japanese beer giant is still subject to approval by the Foreign Investment Review Board

The Australian Competition and Consumer Commission's (ACCC) investigation found that the sale, which had been labelled a "bombshell" for the independent brewing sector when it was announced in September, would not substantially lessen competition in the supply of beer.

ACCC Commissioner Stephen Ridgeway said while it was initially concerned about the removal of a large popular independent craft brewer from the market, it found there was a wide range of alternatives on offer.

Stephen Ridgeway wearing a black suit, shirt and tie.
Commissioner Stephen Ridgeway says the investigation included market inquiries with customers, competitors and industry bodies.(Supplied: ACCC)

"There were a range of alternative suppliers of independent craft beer that have the geographic footprint and capacity capable of servicing Stone & Wood's current customers," he said.

"There is growing consumer demand for independent beer both on pubs and clubs and off premises in bottles, and there's been a big response to this demand and I think there are over 600 independent brewers."

More opportunities for indie brewers

Rather than stopping the growth of independent brewers, Mr Ridgeway said the ACCC's investigations indicated the sale may lead to increased opportunities for independent brewers.

"It seems quite a few premises save some taps for independent brewers, and that Stone & Wood, after the acquisition by Lion, would not be regarded as an independent brewer and would free up those taps for independent brewers," he said.

"There appear to be quite a few opportunities for independent brewers to expand with more contract brewing now, more opportunity to expand capacity, so we couldn't find it would impact on consumers in any significant way."

Cans of craft beer in a bottle shop fridge.
The ACCC found that the Fermentum sale to Lion may create opportunities for independent brewers.(ABC Rural: Kim Honan)

While the ACCC has given Lion the tick of approval to purchase one of the country's largest independent brewers, it is still concerned about large companies acquiring small, independent competitors. 

"You can look at the beer market in different ways and there's mainstream and then there's independent beer, and craft beer but there have been a number of the craft beers acquired by majors," he said. 

"Now that between Lion and Asahi having such a high percentage of the market, with that level of concentration, we're naturally going to have a look at each transaction closely."

Lion and Asahi, also Japanese owned, holds more than 90 per cent of the overall beer market in Australia. 

Inside the Stone and Wood brewery with a bar and beer tanks.
Stone & Wood, one of Australia's largest independent brewers, could soon be owned by beer giant Lion.(ABC Rural: Kim Honan)

Carbon neutral future for Fermentum

Lion has welcomed the ACCC approval and said that it remains business as usual for the company with no change to its operation. 

"We look forward to moving through the remaining regulatory approvals and preparing to complete the acquisition over the coming period," a spokesperson said. 

"Lion is Australia's first large-scale carbon neutral brewer and we will be backing the Stone & Wood, Two Birds and Fixation breweries to go carbon neutral as well."

The Fermentum sale includes Lion's $50 commitment to Stone & Wood's new brewery at Murwillumbah, $5 million donation to the inGrained Foundation and $1 million to Big Scrub Landcare. 

The proposed acquisition is still subject to approval from the Foreign Investment Review Board (FIRB).

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Posted 10 Nov 202110 Nov 2021Wed 10 Nov 2021 at 4:27amShareCopy linkFacebookTwitterArticle share optionsShare this onFacebookTwitterLinkedInSend this byEmailMessengerCopy linkWhatsApp

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