UK: Innocent Drinks, Coca-Cola Co tie-up gets green light
Innocent, which controls more than two thirds of the UK smoothie market, said in April that it had agreed to sell a stake of between 15% and 20% in its business to The Coca-Cola Co (TCCC) for GBP30m.
The tie-up will not lead to a monopoly on supply, the vast majority of retailers and on-trade buyers told the Office of Fair Trading (OFT), as part of its inquiry into the deal.
However, the OFT, which published its full report on the deal today (11 June), indicated that it did encounter some opposition to the move.
"It was put to the OFT that following the transaction, TCCC will have an unrivalled portfolio of soft drinks and smoothies/juices/nectars," it said.
"Further, if smoothies are considered to be in close competition with chilled 100% fruit juices then the Innocent brand is not as strong (in terms of overall sales volumes) as PepsiCo's Tropicana brand."
The watchdog added: "Retailers and other customers did not consider that the proposed transaction would allow TCCC to gain a significant product range advantage over TCCC's main rivals (namely PepsiCo and its UK bottler and distributor Britvic)."
As part of the deal, James Quincey, group business unit president for Coca-Cola Europe, will get a seat on Innocent's investment board.
Innocent has said that the deal will allow it to expand overseas, but critics have argued that the 10-year-old group has compromised its ethical credentials by linking up with the US-based soft drinks giant.
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