CC provisionally clears soft drinks merger
11 Jun 2013
The Competition Commission (CC) has provisionally cleared the proposed acquisition by AG BARR plc (Barr) of Britvic plc (Britvic).
In a summary of its provisional findings on the merger published today, the CC has concluded that the proposed acquisition is not expected to result in a substantial lessening of competition and would not cause wholesale prices to increase significantly. The CC’s assessment, and the views of most retailers and other customers of the merging companies, suggested that the two companies’ brands were not close competitors. The CC also did not consider that the increased size of the merged company would mean new entrants and smaller companies would be disadvantaged significantly in obtaining listings at retailers.
Barr and Britvic are both active in the manufacture and supply of a range of carbonated and non-carbonated soft drink brands: IRN-BRU is the largest Barr brand and has a particularly strong presence in Scotland. Other Barr brands include Orangina, KA and Rubicon. Britvic’s brands include Robinsons, Fruit Shoot, Tango and Pepsi.
Alasdair Smith, CC Deputy Chairman and Chairman of the Barr/Britvic Inquiry Group, commented:
‘We have provisionally concluded that customers will not lose out from the merged Barr/Britvic. Given the size of this market and the number of consumers who could be potentially affected, it was important to examine the likely effects carefully.
‘Carrying out a full investigation gave us the chance to look in detail at consumer preferences. These told us that most consumers tend to see Barr and Britvic brands as distinct products rather than as close substitutes for each other. Looking at consumer preferences and other evidence, we were able to conclude that the proposed merger was unlikely to substantially lessen competition.’
The CC will publish the full provisional findings report shortly. The Office of Fair Trading (OFT) referred the case on 13 February 2013. The CC is expected to publish its final report by 30 July 2013.
Any interested party is invited to respond to the provisional findings, in writing, by no later than 1 July 2013. To submit evidence, please email Barr-Britvic@cc.gsi.gov.uk or write to:
Notes for editors
1. The CC is an independent public body, which carries out investigations into mergers, markets and the regulated industries.
2. The members of the Barr/Britvic Inquiry Group are: Alasdair Smith (CC Deputy Chairman and Chairman of the Inquiry Group), Ian Jones, Alexander Johnston and Katherine Holmes.
3. The Enterprise Act 2002 empowers the OFT to refer to the CC completed or proposed mergers for investigation and report which create or enhance a 25 per cent share of supply in the UK (or a substantial part thereof) or where the UK turnover associated with the enterprise being acquired is over £70 million.
4. The CC has a 24-week period in which it is required to publish its report, which may be extended by no more than eight weeks if it considers that there are special reasons why the report cannot be published within that period.
5. Further information on this inquiry, including the terms of reference and other key documents, as well as on the CC and its procedures, including its policy on the provision of information and the disclosure of evidence, can be obtained from the CC website at: www.competition-commission.org.uk.
6. Enquiries should be directed to Rory Taylor or Siobhan Allen or by ringing 020 7271 0242.