Diageo still not in touch over sale of Independent

Global drinks giant Diageo's application for clearance to buy Independent Liquor's Australian business has not been matched by a similar application to buy its New Zealand operations.

Diageo Australia has approached the Australian Competition and Consumer Commission (ACCC) for clearance to buy Independent Distillers and findings are due to be announced in early December.

But the Commerce Commission in Wellington said yesterday it had not received an approach from Diageo Australia, which makes Bundaberg rum and includes brands such as Guinness, Johnnie Walker and Smirnoff.

A Diageo spokeswoman said in Sydney yesterday she could not confirm if her company would make an application to the Commerce Commission over New Zealand assets.

By contrast, Lion Nathan - which is also considering buying Independent - first approached the Commerce Commission over the New Zealand business before making an application to the ACCC for clearance to buy the Independent Distillers group across the Tasman.

The Commerce Commission gave Lion Nathan clearance and the ACCC's response to the brewer is due next week.

Macquarie analyst Callum Bramah said it was possible that the lack of an application in New Zealand signalled that Diageo may be interested only in Australian assets.

But he thought it more likely a trade buyer would want to own Independent's brands on both sides of the Tasman.

Bramah said Diageo was the ready-to-drink market leader in Australia, with about 33 per cent market share by value, compared with Independent's 19 per cent. In New Zealand, Independent had nearly 70 per cent of the RTD market, he said.

He believed Diageo could find it harder to get clearance from the ACCC if it focused solely on the RTD market. But he suspected the ACCC would consider the impact of a Diageo purchase on the whole alcohol market.

Diageo and Lion Nathan already have an agreement under which Lion Nathan distributes Diageo's brands in New Zealand.

Lion Nathan is competing with up to six bidders for Independent.

Other contenders are believed to include Foster's, Coca-Cola Amatil and private equity fund Pacific Equity Partners.