Britvic AG Barr merger moves closer

The merger between Britvic and AG Barr has moved a step closer after the Competition Commission gave it the green-light but Britvic has cast some doubt on the union after declaring it is “in a different place” to when the deal was first mooted. 

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In a statement today (11 June), the Competition Commission says the union of the two would not lessen competition and that the brands owned by the two companies – which include Britvic’s J2O, Robinson’s and Tango and Barr’s Irn-Bru and Rubicon – were not close competitors.

Alasdair Smith, deputy chairman of the Competition Commission and chairman of the Barr/Britvic Inquiry Group, says: “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.”

Britvic welcomed the deal but says it is focussed on its own strategy to grow sales and profit.

Britvic’s Chairman, Gerald Corbett, adds: ”Our company is in a different place to last summer when the terms of the merger were agreed. The cost savings from merging are less, we are performing better, we have new management and we have a new strategy to deliver good growth internationally as well as in the UK.

”These are among the issues the board will reflect on in August once the Competition Commission’s conclusions are known in order to ensure that it acts in the best interests of Britvic’s shareholders.”     

The merger was first proposed in September 2012. It was referred to the Office of Fair Trading soon after and passed to the Competition Commission in February 2012.

The Commission’s findings are provisional ahead of its final report in July.

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