AUSTRALIA | ACCC has opposed a proposed acquisition by MicroStar Logistics for keg pooling service assets of Konvoy Holdings Pty Ltd.
The ACCC has decided to oppose MicroStar Logistics LLC’s (MicroStar) proposed acquisition of the assets of Konvoy Holdings Pty Ltd (Receivers and Managers Appointed) (Konvoy), both of which supply keg pooling services to brewers across Australia.
MicroStar, which operates under the name Kegstar in Australia, and Konvoy are the only suppliers of keg pooling services, which enable brewers to rent kegs on a short-term basis to supply alcoholic drinks on tap to licensed venues.
“Our investigation has found that MicroStar acquiring the assets of Konvoy, the only other provider of keg pooling services in Australia, would be likely to substantially lessen competition,” ACCC Commissioner Dr Philip Williams said.
While independent brewers can use their own kegs or leased kegs, the ACCC considers that these options generally serve different purposes and would not be a viable alternative should keg pooling prices increase.
For example, owning kegs or renting them under long-term leases may be suitable when independent brewers are located close to the licensed venues, but these models are unlikely to be viable when servicing venues located further away.
“Without competitors, MicroStar could increase prices above a competitive level and reduce services or quality of service for customers,” Dr Williams said.
“Higher prices for keg pooling would have a significant impact on many independent brewers.”
The ACCC noted that Konvoy is in receivership and that its assets may ultimately be liquidated.
“Our view is that if the proposed acquisition does not proceed, the Konvoy business is likely to continue, whether under new or existing ownership; however, we recognise that liquidation of the assets is also a potential outcome,” Dr Williams said.
“If Konvoy’s assets are liquidated, they would likely remain in the market and be available to new or emerging rivals to MicroStar, or to independent brewers.”
MicroStar is the largest independent keg services company in the United States with operations in the UK, Europe, Australia and New Zealand. It entered the Australian market in 2021 via the acquisition of the Kegstar business from Brambles.
In Australia, Kegstar handles the activities and costs relating to a brewery’s keg use (for example, keg capital costs, reverse logistics, repair and maintenance, and keg management labour) under a pay-per-fill (PPF) model.
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