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UK Competition Authority Has Concerns Over Refresco/Cott Deal

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UK Competition Authority Has Concerns Over Refresco/Cott Deal

UK Competition Authority Has Concerns Over Refresco/Cott Deal
January 04
09:34 2018

Refresco has been informed by the Competition and Markets Authority (CMA) in the UK that the proposed $1.25 billion (£935 million) acquisition of Cott’s bottling activities raises potential competition concerns for one specific category, juice drinks in PET using a special aseptic production process that allows them to be sold preservative-free and without refrigeration. In the UK, the combined company produces these products in only two factories, Bridgwater (Refresco) and Nelson (Cott).

Rachel Merelie, acting executive director of CMA and decision maker in this case, says: “These companies supply well-known UK shops and brands with soft drinks, who in turn sell these to thousands of people daily. It is therefore important that we address any issues to ensure that shoppers do not lose out. We have looked at all aspects of this merger and have concerns that the merger could lead to reduced competition in the manufacturing and packaging of certain juice drinks. This may result in higher prices or quality standards slipping for stores and brands, with potential knock-on effects to end-consumers.”

The CMA will now refer the merger for an in-depth investigation unless Refresco offers acceptable undertakings to address competition concerns.

Refresco is currently examining the details of the decision but has indicated that it is willing to offer suitable remedies and will fully co-operate with the CMA to address the concerns raised.

Hans Roelofs, chief executive of Refresco, says: “The initial investigation of the CMA did not find any competition concerns for most of our products. However, they have raised concerns for one specific product category produced by Refresco and Cott. With the clearance we received earlier in the process from the US and Canadian regulatory authorities and the overwhelming support from our shareholders, we are willing to propose remedies to the CMA to address this specific issue and put us on the right track to also obtain clearance in the UK. We continue to co-operate with the CMA in order to progress the acquisition and work towards a successful completion.”

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