UK: Carlsberg takeover of Britvic investigated by competition watchdog

A competition watchdog has begun an investigation into Carlsberg's £3.3 bln agreement to buy soft drinks company Britvic, best known for Robinsons squash and J2O, BBC reported on September 10.

The Danish brewer said it wanted create a single beverage company called Carlsberg Britvic to grow its business in the UK and western Europe.

However, Competition and Markets Authority (CMA) has been investigating potential concerns that it could reduce competition across the UK market.

Britvic, external, which is based in Hemel Hempstead, Hertfordshire, had previously rejected a £3.1bn bid, but both companies announced an agreement in July.

The two drinks giants said the integration of Carlsberg's array of beers with Britvic's soft drinks would create an "enlarged international group" that could expand into "multiple drinks sectors".

The CMA said it planned on gathering information before kickstarting a formal investigation.

CMA is a competition watchdog which looks into concerns such as whether a merger or takeover could result in market dominance at the expense of consumers with higher prices, lower quality products or less choice for customers.

People have been invited to have their say on the potential impact it could have on competition in the UK and submit their thoughts to the watchdog.

Carlsberg, external, which also owns lager brands including Kronenbourg1664 and Brooklyn, said it believed the integration with Britvic could secure it £100m in cost efficiencies a year.

Britvic also holds an exclusive licence with US partner PepsiCo to make and sell brands such as Pepsi, 7up and Lipton iced tea in the UK.

The acquisition was approved by Britvic's shareholders last month, with the firms expecting to complete the deal in the first few months of 2025 should they get the approval from the competition regulator.

Ten years ago, Britvic closed its bottling plant in Chelmsford in Essex, where it was founded, but it still has factories in Leeds, Beckton in east London, and Rugby, with centres in Lutterworth, Solihull and Tamworth.

Carlsberg's brewery network, external includes the Carlsberg brewery in Northampton, Marston’s in Burton upon Trent and Banks’s in Wolverhampton.

10 September, 2024