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OFT investigates Barr’s planned takeover of Britvic

Friday February 15th, 2013

 The Office of Fair Trading has referred A.G. BARR’s proposed acquisition of Britvic plc to the Competition Commission, due to concerns it would dominate the soft drink market.

The OFT’s investigation found that the acquisition raised concerns with respect to the loss of the competitive constraint from some of Britvic’s brands on Barr’s IRN BRU and Orangina brands.

Barr and Britvic are two of the three main players in the UK that offer a wide range of soft drink brands. The other is Coca-Cola Enterprises.

Barr’s brands include Orangina, KA and Rubicon as well as IRN BRU, which has a particularly strong presence in Scotland. Britvic’s brands include Robinsons, Fruit Shoot, Tango and Pepsi.

Consumer survey evidence submitted by the merging parties showed that Coca-Cola and other brands supplied by Coca-Cola Enterprises were important alternative choices for many drinkers of Barr’s IRN BRU and Orangina brands.

However, it also showed that some of Britvic’s brands, in particular Pepsi and Tango, were also sufficiently close alternatives to raise competition concerns. As a result, the OFT could not rule out the possibility of higher prices post-merger.

The soft drinks industry makes over £9 b each year in Britain.

Amelia Fletcher, OFT Chief Economist, said: “This merger will see the UK market reduce from three to two main players. Our investigation has identified competition concerns relating to this deal with respect to Barr’s IRN BRU and Orangina brands which could lead to higher prices for consumers.”

 

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