Coke appeals against CCSB ruling

Coca-Cola is appealing against the European Commission’s scrutiny of the takeover of Coca-Cola & Schweppes Beverages (CCSB).

When the deal, which saw Coca-Cola Enterprises take control of CCSB, was approved in February, Brussels attached a number of conditions.

It insisted on monitoring the performance of each brand in the CCSB portfolio – half of which are owned by Coke and the rest by Cadbury Schweppes.

The conditions of the deal focused on protecting the future “production, distribution, marketing and sale” of Cadbury Schweppes brands.

Now Coke claims the EC is misinterpreting the non-alcohol drinks market, as the tight regulations it imposed on the deal are based on Coke being the most dominant force in the cola market.

Coke is arguing that it is just one player in the vast 6.7bn UK soft drinks market. A statement by the company explains: “Coke has chosen to appeal against the EC’s… principal finding that a separate market exists for cola-flavoured soft drinks in Britain. We believe that all our brands compete in the non-alcoholic beverage market.”

The merger involved CCE buying Cadbury’s 51 per cent stake for 620m and Coke selling its stake in CCSB to CCE for 616m. Coke has a 44 per cent stake in CCE.

Coca-Cola and Cadbury Schweppes have a number of brands which are in direct competition with each other, such as Coke’s Fanta and Fruitopia (since withdrawn), against Cadbury Schweppes’ Sunkist and Oasis.

Feature, page 44

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