SummaryCoca-Cola Amatil Limited - acquisition of Quirks Refrigeration.
Market definitionNational market for the sale, hire, servicing and maintenance of commercial refrigeration equipment.
Competition analysisIn January 2005 the ACCC decided not to oppose the acquisition. CCA is involved in the manufacture, distribution and marketing of non-alcoholic beverages and hires refrigeration equipment to retailers of its non-alcoholic beverage products. Quirks sells, hires and services commercial refrigeration equipment and its customers include retail outlets and food and beverage manufacturers.
A number of alternative national suppliers for refrigeration equipment would remain after the acquisition and corporate customers also have the ability to vertically integrate by acquiring and servicing their own fleet of refrigeration units. Thus, the ACCC considered it unlikely that the acquisition will cause a substantial lessening of competition for the sale, hire or servicing of commercial refrigeration equipment.
The ACCC noted that there is unlikely to be a significant increase in the refrigeration space actually controlled by CCA as the majority of Quirks' units are hired to corporate customers that control the food and beverage products that are supplied in them via re-hire arrangements with retail outlets.
In relation to Quirks' existing corporate customers, the ACCC considered whether the acquisition would provide CCA with the ability and incentive to hinder the distribution activities of those customers that compete with CCA. This included CCA gaining access to confidential information, raising rivals' costs and reducing service quality.
The ACCC noted that little sensitive information could be accessed by CCA for use against beverage rivals. In relation to information regarding new outlet placements and new product launches, customers are able to source new refrigeration units from alternative suppliers and thus remove the risk of such information passing to CCA. Further, the acquisition does not give CCA any greater ability to induce retail outlets to accept a tied-CCA refrigeration unit over a non-tied unit, or a unit tied to a competing beverage manufacturer. In relation to reduced service standards, the ACCC noted that service standard levels are protected contractually and, in the event of a systematic failure by Quirks to comply, customers could seek supply from third parties.
Accordingly, the ACCC formed the view that the acquisition is unlikely to substantially lessen competition.