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219/05 28 November 2005
The OFT today referred the completed acquisition by Cott Beverages Limited of Macaw (Holdings) Limited to the Competition Commission.
The OFT has decided that the test for reference is met in relation to the supply of own label carbonated soft drinks in Great Britain.
The merged entity supplies 57 per cent of own label carbonated soft drinks in the UK. Most customers raised concerns that the merger would lead to higher prices.
Vincent Smith, OFT's Competition Enforcement Director, said:
'The key question is whether customers could resist post-merger price increases by changing to credible alternative suppliers. There is substantial doubt on this issue and the OFT therefore has referred the merger to the Competition Commission for further examination.'
The CC is expected to report by 15 May 2006.
NOTES
1. The Reference Test — The OFT has a duty to make a reference to the CC if the OFT believes that it is or may be the case that a relevant merger situation has been created; and the creation of that situation has resulted, or may be expected to result, in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.
2. Under the Enterprise Act 2002 a relevant merger situation is created if two or more enterprises have ceased to be distinct enterprises; and the value of the turnover in the United Kingdom of the enterprise being taken over exceeds £70 million; or as a result of the transaction, in relation to the supply of goods or services of any description, a 25 per cent share of supply in the UK (or a substantial part thereof) is created or enhanced.
3. The CC may extend the 24 week period within which it is required to publish its report by no more than eight weeks if it considers that there are special reasons why the report cannot be published within that period.
4. The text of this decision is available from the Mergers section of this site.
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