Lion, which produces brews including Tooheys and XXXX, in September outlined a deal to buy the vendors of the Stone & Wood beer in Byron Bay, NSW. The sale price was not revealed.

The Australian Competition and Consumer Commission examined whether the proposal would substantially reduce competition in supplying beer.

Fermentum has plans to expand capacity and could have challenged the biggest brewers in Australia, Lion and Asahi/Carlton United Breweries.

The ACCC on Thursday found a range of independent beers would remain should the sale proceed.

Many pubs and clubs reserve one or two taps for independent brewers. ACCC officials said it was likely these brewers would take the place of Stone & Wood.

The watchdog said the Fermentum products did not closely compete with those of Lion. The former’s drinks usually carry a higher price.

Other Fermentum drinks include Fixation, Forest for the Trees and Two Birds.

The company has breweries in the NSW towns of Byron Bay and Murwillumbah, and Brisbane and Melbourne.

This is not the first time Lion has bought smaller brewers. It already owns New Belgium Brewing and Little Creatures.

Japanese business Kirin Holdings bought Lion (then Lion Nathan) in 2009.