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CMA refers Refresco-Cott soft drinks merger to in-depth investigation

CTBR Staff Writer Published 04 January 2018

The UK's Competition and Markets Authority (CMA) has found that shoppers could face higher prices due to merger of soft drink manufacturers Refresco and Cott.

The CMA said Refresco's takeover of Cott's global beverage manufacturing business may lead to higher prices for some supermarkets and leading household brands.

Refresco and Cott manufacture, package and distribute soft drinks for several brands, supermarkets and shops in the UK.

A range of different soft drinks which are produced by each business are packaged in various formats and sizes.

The initial investigation by the CMA into the merger did not find any competition concerns for the majority of the products.

The regulator, however, said both companies supply juice drinks using a special aseptic production process that enables them to be sold preservative-free and without refrigeration.

The CMA is concerned about the increase in prices and decrease in quality for the products in the market after the lowered competition, if the merger takes place.

CMA acting executive director Rachel Merelie said: “These companies supply well-known UK shops and brands with soft drinks, who in turn sell these to thousands of people daily. It is therefore important that we address any issues to ensure that shoppers do not lose out.

“We have looked at all aspects of this merger and have concerns that the merger could lead to reduced competition in the manufacturing and packaging of certain juice drinks. This may result in higher prices or quality standards slipping for stores and brands, with potential knock-on effects to end-consumers.”

Refresco said that it is willing to provide suitable remedies and will fully cooperate with CMA to address the issues.

Refresco CEO Hans Roelofs said: “With the clearance we received earlier in the process from the U.S. and Canadian regulatory authorities and the overwhelming support from our shareholders, we are willing to propose remedies to the CMA to address this specific issue and put us on the right track to also obtain clearance in the UK.

“We continue to cooperate with the CMA in order to progress the acquisition and work towards a successful completion.”   

Image:  The CMA has found that the merger of soft drink manufacturers Refresco and Cott could lead to higher prices for some supermarkets and leading household brands. Photo: Courtesy of REFRESCO GROUP.