The Australian Competition and Consumer Commission will not intervene in the proposed acquisition of Pepsi Cola Bottlers Australia by Cadbury Schweppes Pty Ltd, ACCC Chairman, Professor Allan Fels, announced today.
"The ACCC conducted extensive market inquiries, speaking to numerous customers and competitors of the companies", he said. "It also drew on the information received last year in relation to the proposed acquisition of Cadbury Schweppes plc by The Coca Cola Company.
"In reaching this decision the ACCC noted that Pepsi and Schweppes currently specialise in different segments of the market: Pepsi is strong in cola and Schweppes is strong in flavours and mixers.
"In addition, the merged entity will continue to face strong competition from Coca-Cola Amatil, which will remain the strongest player in all channels of the relevant market: in supermarkets, milk bars and convenience stores, vending machines and in pubs, restaurants and entertainment venues.
"The Coke business currently has around 58 per cent of the grocery channel of the carbonated soft drink market. Its share is even higher in the non-supermarket segments, such as the supply of carbonated soft drinks to refrigerators in convenience stores or to hotels, clubs and sporting venues.
"Information before the ACCC suggested that the acquisition may result in a stronger competitor in the non-grocery segments of the market where Coca Cola Amatil has traditionally been the dominant player.
"The addition of a premium international cola brand to Schweppes’ current range may improve its ability to compete in pubs, restaurants and entertainment venues.
"The availability of the Pepsi brand in convenience stores and milk bars may also increase once it becomes part of Schweppes’ distribution system.
"Taking this information into account, the ACCC concluded that the proposed acquisition would be unlikely to result in a substantial lessening of competition in the national market for the production and wholesale supply of carbonated soft drinks".