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Britvic condemns investigation into planned merger Britvic condemns investigation into planned merger
(7 months later)
The chairman of the soft drinks company Britvic has criticised a move to conduct a full-blown competition investigation into its merger with rival Irn Bru maker AG Barr, which has effectively put the £1.4bn tie-up on hold.The chairman of the soft drinks company Britvic has criticised a move to conduct a full-blown competition investigation into its merger with rival Irn Bru maker AG Barr, which has effectively put the £1.4bn tie-up on hold.
Gerald Corbett, chairman of Britvic, said the deal was intended to give the enlarged company a better chance to compete with the market leader, Coca-Cola.Gerald Corbett, chairman of Britvic, said the deal was intended to give the enlarged company a better chance to compete with the market leader, Coca-Cola.
"We've got two British companies trying to strength themselves against a big American corporation. If this is government industrial policy, I'm going to take French lessons," said Corbett."We've got two British companies trying to strength themselves against a big American corporation. If this is government industrial policy, I'm going to take French lessons," said Corbett.
While a potential 500 job losses may be staved off, for now, the delay has failed to provided a lifeline to Paul Moody, chief executive of Britvic during the recall of the Fruit Shoot range, who was going to leave once the deal was done.While a potential 500 job losses may be staved off, for now, the delay has failed to provided a lifeline to Paul Moody, chief executive of Britvic during the recall of the Fruit Shoot range, who was going to leave once the deal was done.
Britvic named his successor as the company insider Simon Litherland "with immediate effect" while Moody will act as a consultant for the next months, on a £350,000 fee, and take his £2.9m pension pot accrued after 16 years with the firm.Britvic named his successor as the company insider Simon Litherland "with immediate effect" while Moody will act as a consultant for the next months, on a £350,000 fee, and take his £2.9m pension pot accrued after 16 years with the firm.
Britvic's brands include Robinsons, Fruit Shoot, Tango and Pepsi while Barr's range includes Irn-Bru and Orangina.Britvic's brands include Robinsons, Fruit Shoot, Tango and Pepsi while Barr's range includes Irn-Bru and Orangina.
The Office of Fair Trading referred the deal to the Competition Commission after concluding that while Coca-Cola was a competitor to Irn Bru and Orangina, Britvic's Pepsi and Tango were also alternatives, which could lead to higher prices.The Office of Fair Trading referred the deal to the Competition Commission after concluding that while Coca-Cola was a competitor to Irn Bru and Orangina, Britvic's Pepsi and Tango were also alternatives, which could lead to higher prices.
Amelia Fletcher, chief economist at the Office of Fair Trading (OFT), said: "The soft drinks industry is an important one for many consumers in Great Britain. People spend over £9bn each year on these drinks. This merger will see the UK market reduce from three to two main players.Amelia Fletcher, chief economist at the Office of Fair Trading (OFT), said: "The soft drinks industry is an important one for many consumers in Great Britain. People spend over £9bn each year on these drinks. This merger will see the UK market reduce from three to two main players.
"Our investigation has identified competition concerns relating to this deal with respect to Barr's Irn-Bru and Orangina brands, which could lead to higher prices for consumers"."Our investigation has identified competition concerns relating to this deal with respect to Barr's Irn-Bru and Orangina brands, which could lead to higher prices for consumers".
The two companies said they would continue to work together to try to create Barr Britvic Soft Drinks while they await a full report into the Competition Commission decision that triggered an investigation. That report can take more than 24 weeks.The two companies said they would continue to work together to try to create Barr Britvic Soft Drinks while they await a full report into the Competition Commission decision that triggered an investigation. That report can take more than 24 weeks.
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