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AUS: Refresh warns of Coke HOD dominance

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Australian water producer Refresh Group has again warned of a "near-monopoly" in the country's HOD sector after it decided not to bid for water cooler distribution firm Palm Springs.

Refresh's request to conduct due diligence on Palm Springs was blocked by the company due to a clause in a prior deal with Coca-Cola Amatil.

Last month, Palm Springs and Coke Amatil agreed on a A$7.4m (US$5.7m) deal, an agreement that granted the Coke bottler exclusivity on the takeover.

Refresh managing director Henry Heng told just-drinks today (21 September) that it was not in the interests of the company's shareholders to bid without looking at Palm Springs' books.

"As a listed company, we have a responsibility to our shareholders. We cannot pay for something we cannot see," he said from Perth.

Heng said the deal would give Coke Amatil "around three-quarters" of the HOD sector in Australia. Refresh had asked the country's competition watchdogs to look at the impact of a successful Coke Amatil takeover, Heng said, but the deal was cleared.

Heng added: "We actively made submissions but could not block the deal through that channel. The value of the transaction is small, it's only A$7.4m, and so it's off the radar of the anti-competition body."

Heng said Refresh was still on the look-out for acquisitions in the HOD sector. "We will certainly look for opportunities. Everyone else in the sector is pretty small and we have had talks with other companies but at this point nothing has materialised yet."


Sectors: Soft drinks, Water

Companies: Coke, Coca-Cola Amatil

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