Fears that The Coca-Cola Co could use its market dominance in CSDs to unfairly beat down competitors in the juice category was behind the collapse of the Huiyuan deal, according to a report.

China's Ministry of Commerce rejected Coca-Cola's US$2.4bn bid for Huiyuan last week because of concern about Coca-Cola's subsequent dominance of the soft drinks sector, a Ministry spokesperson said in an interview with the official People's Daily publication yesterday (24 March).

The spokesperson said that, in assessing the bid under China's Anti-Monopoly Law, authorities had treated soft drinks as one sector, rather than separating carbonates and juice into separate categories.

He said that the Ministry was concerned that Coca-Cola could transfer its dominance of the CSD market to juice, using its overrall market influence to drive out competitors.

Hong Kong-based Huiyuan Juice Group is China's largest juice firm with around a 40% market share.

If approved, Coca-Cola's bid would have led to one of the largest foreign takeovers in China's history.

The country's Ministry of Commerce has stressed repeatedly in the last week that its rejection of the deal, announced on 18 March, does not signal that China is closing the door on foreign investment. It has denied accusations of economic nationalism.

Huiyuan released a statement last week criticising the decision. Its website has been down since last Thursday.

"We are disappointed, but we also respect the MOC's decision," said Muhtar Kent, Coca-Cola's president and CEO, following the ruling.