JOHANNESBURG - South African Breweries (SAB) is a step closer to acquiring the Smirnoff ready-to-drink (RTD) range of products, mostly ciders and mixes, after the Competition Commission yesterday announced the approval of the acquisition from Diageo South Africa.
The commission has recommended to the Competition Tribunal that SAB is granted the right to acquire Smirnoff RTD products, including all RTDs related to the Smirnoff brand (including Smirnoff Storm, Guarana, Spin, Pine Twist and Berry Twist), (Smirnoff Brands) and, for the avoidance of doubt, excluding the Smirnoff Vodka brand.
This also includes the Guinness products, but excluding Guinness Foreign Extra Stout and Guinness Malta brands (Guinness Brands).
The commission found that while the merger raised a material competition overlap in the market for the manufacturing and supply of flavoured alcoholic beverages (FABs), on the whole the proposed transaction is unlikely to distort competition and have any notable effect on the prices of Diageo and SAB’s FABs post-merger as the parties will still be constrained by other brands.
It said the transaction was unlikely to substantially negatively affect the businesses of Diageo’s input suppliers because the Smirnoff RTD products accounted for 10 percent of the market for the manufacture and supply of FABs.