AUSTRALIA: CCA takeover of Berri to be blocked?
Coca-Cola Amatil's proposed takeover of Berri Ltd may be blocked. Reports in today's press suggest that the Australian Competition and Consumer Commission (ACCC) will oppose the acquisition of the country's biggest fruit juice company. Coca-Cola Amatil (CCA) has already announced that it disagrees with the decision.
According to reports, the ACCC believes the takeover would allow CCA to use its strong position in the beverage market to link sales of Berri's juice products to its dominant Coke soft-drink products.
Following consultation with competing manufacturers, retailers, industry associations and other interested parties, the ACCC feels that the acquisition could lead to reduced consumer choice and higher prices for consumers.
With Berri accounting for almost half of Australia's total sales of fruit juice and fruit drinks, and CCA holding the position of number one non-alcoholic beverage manufacturer in the country, the ACCC investigation has been testing if the proposed takeover would breach the Trade Practices Act of 1974.
Meanwhile, Dow Jones has reported that CCA believes the decision to be misplaced. In an interview, CCA managing director, Terry Davis, said: "We disagree with the conclusion that there is a sufficient likelihood that leveraging of CCA's market power would occur to reduce consumer choice and cause significant competitive harm."
CCA is currently considering its options.
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