China insists Coke rejected to protect consumers
Thursday, 26 March 2009
BEIJING, Mar 25(AP): China denied Wednesday that it rejected Coca-Cola Co.'s bid to buy a Chinese fruit juice maker to keep a local brand out of foreign hands and insisted it acted to preserve competition.
In its first detailed explanation of the March 18 ruling, the Commerce Ministry said it looked at China's whole beverage market and concluded Coca-Cola's dominance in carbonated drinks could be used to promote sales of Huiyuan Juice Group, stifling competition and leading to higher prices.
The rejection of the $2.5 billion deal sparked concern that Beijing was trying to keep Chinese brands out of foreign hands. Industry analysts questioned the brief announcement last week that cited anti-monopoly concerns, noting that Coca-Cola and Huiyuan were in different lines of business.
In its first detailed explanation of the March 18 ruling, the Commerce Ministry said it looked at China's whole beverage market and concluded Coca-Cola's dominance in carbonated drinks could be used to promote sales of Huiyuan Juice Group, stifling competition and leading to higher prices.
The rejection of the $2.5 billion deal sparked concern that Beijing was trying to keep Chinese brands out of foreign hands. Industry analysts questioned the brief announcement last week that cited anti-monopoly concerns, noting that Coca-Cola and Huiyuan were in different lines of business.