UK: OFT reveals full concerns over AG Barr, Britvic merger
By James Wilmore | 6 March 2013
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AG Barr and Britvic are convinced they can satisfy competition concerns over the deal |
The UK's Office of Fair Trading (OFT) has said evidence from AG Barr and Britvic was not “convincing” enough to satisfy competition concerns over their merger.
The authority yesterday (5 March) published its full 39-page ruling on the proposed tie-up, which it referred to the Competition Commission last month. Barr and Britvic have said they believe they can satisfy the concerns of regulators.
The OFT said the evidence showed that Britvic's brands offer a “sufficiently strong competitive constraint” to both Barr's Irn Bru and Orangina brands and that the loss of this constraint could elimiante that competition.
It added: “The OFT believes that it may be the case that the transaction will lead to an increased negotiating strength for the parties vis-à-vis customers, and hence higher prices given the resulting combination of brands.”
However, the authority said the merger would not affect water or fruit drinks as the companies do not compete “strongly” in this area.
The Competition Commission is expected to rule on the merger by July.
Expert analysis
The Future of the UK Non-Alcoholic Drinks Packaging to 2017
The Future of the UK Non-Alcoholic Drinks Packaging to 2017 is a data only report providing extensive and highly detailed time series consumption data on primary and outer packaging in the market The report provides in-depth quantitative data on retail non-alcoholic drinks packaging, covering key segmentations such as pack material and type, closure material and type, outer and multi-pack information, for the latest financial year (current year) and the extreme ends of the historical and forecast periods
Sectors: Mergers & acquisitions, Soft drinks
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