Retailing, Franchising, and Consumerism Business Intelligence in China

China's MOC Rejects Coca Cola's Takeover Of Huiyuan

The Chinese Ministry of Commerce has announced that in accordance with China's anti-monopoly law, it has decided to reject Coca-Cola 's application to acquire China Huiyuan Juice Group.

The MOC said that the acquisition may disturb market competition in China and the major reasons for its rejection of the transaction are if Coca-Cola successfully acquires Huiyuan, the company is likely to have a dominant position in China's juice market and consumers may have to accept high prices set by the company as they will have few choices; if Coca-Cola successfully acquires Huiyuan, Coca-Cola's control over the Chinese juice market will be enhanced, which may hinder other companies' entry into the market; and if Coca-Cola successfully acquires Huiyuan, it may squeeze the market space of Chinese small and medium-sized enterprises and suppress other companies' participation in the Chinese juice market.

Both Coca-Cola and Huiyuan said they respected the decision of the MOC. Huiyuan has published an announcement, which stated that the company respects the MOC's decision and it is continuing normal production.

Muhtar Kent, president and CEO of Coca-Cola, said he regrets the decision, but he respects the decision of MOC. The company will no longer seek to acquire Huiyuan.

On September 3, 2008, Coca-Cola offered to buy Huiyuan, China's largest juice maker, for HKD17.92 billion in cash.

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