Coca-Cola Co’s US$2.3 billion bid for China Huiyuan Juice Group Ltd (匯源果汁) was blocked by the Chinese Ministry of Commerce on monopoly concerns.
“After the merger, Coca-Cola may use its dominant position” to limit competition in China’s juice market, the agency said in a statement on its Web site yesterday.
The takeover would have been the biggest foreign takeover of a Chinese company.
The decision will cost Coca-Cola, the world’s biggest soft-drink maker, the opportunity to boost its share of China’s juice market to more than 20 percent. China’s fruit and vegetable-juice sales may rise 20 percent to 97.1 billion yuan (US$14 billion) this year, almost double the rate for carbonated drinks, according to Euromonitor International.
“Beijing wants to protect its own brands,” said Renee Tai, Hong Kong-based food and beverage analyst at CIMB-GK Securities (HK) Ltd. “Drinks are not politically sensitive products, but it’s purely political.”
An acquisition of Huiyuan would have helped Coca-Cola chief executive officer Muhtar Kent maintain the company’s lead over Pepsico Inc as US soda sales slow. Coca-Cola’s sales by volume rose 19 percent last year in China and declined by 1 percent in North America.
Coca-Cola had 15 percent of China’s packaged-beverage market in 2007 compared with Pepsi’s 6 percent, according to Euromonitor. Coca-Cola controlled 54 percent of the Chinese soda market to Pepsi’s 31 percent. Coca-Cola had 10 percent of the fruit and vegetable-juice market while Pepsi’s share was too small to be counted.
Coca-Cola proposed to purchase Huiyuan for at least US$2.3 billion in September, in what would have been the Atlanta-based company’s biggest overseas acquisition. The cost of the deal could have risen to HK$19.6 billion (US$2.5 billion) depending on whether Huiyuan bonds are converted into shares, the Hong Kong-listed juice maker said.
Coca-Cola said on March 6 it plans to invest US$2 billion in China over the next three years to win more of the country’s 1.3 billion consumers. The beverage maker said it had already spent US$1.6 billion investing in China since returning in 1979.
Apart from Coca-Cola, Sprite and Minute Maid, the Atlanta- based beverage maker also sells Yuan Ye, a green tea drink, in China. The carbonated drinks market may grow 11 percent to 74 billion yuan this year, Euromonitor said.
The Legislative Yuan’s Finance Committee yesterday approved proposed amendments to the Amusement Tax Act (娛樂稅法) that would abolish taxes on films, cultural activities and competitive sporting events, retaining the fee only for dance halls and golf courses. The proposed changes would set the maximum tax rate for dance halls and golf courses at 50 and 20 percent respectively, with local governments authorized to suspend the levies. Article 2 of the act says that “amusement tax shall be levied on tickets sold or fees charged by amusement places, facilities or activities” in six categories: “Cinema; professional singing, story-telling, dancing, circus, magic show, acrobatics
Tainan, Taipei and New Taipei City recorded the highest fines nationwide for illegal accommodations in the first quarter of this year, with fines issued in the three cities each exceeding NT$7 million (US$220,639), Tourism Administration data showed. Among them, Taipei had the highest number of illegal short-term rental units, with 410. There were 3,280 legally registered hotels nationwide in the first quarter, down by 14 properties, or 0.43 percent, from a year earlier, likely indicating operators exiting the market, the agency said. However, the number of unregistered properties rose to 1,174, including 314 illegal hotels and 860 illegal short-term rental
INFLATION UP? The IMF said CPI would increase to 1.5 percent this year, while the DGBAS projected it would rise to 1.68 percent, with GDP per capita of US$44,181 The IMF projected Taiwan’s real GDP would grow 5.2 percent this year, up from its 2.1 percent outlook in January, despite fears of global economic disruptions sparked by the US-Iran conflict. Taiwan’s consumer price index (CPI) is projected to increase to 1.5 percent, while unemployment would be 3.4 percent, roughly in line with estimates for Asia as a whole, the international body wrote in its Global Economic Outlook Report published in the US on Monday. The figures are comparatively better than the IMF outlook for the rest of the world, which pegged real GDP growth at 3.1 percent, down from 3.3 percent
ECONOMIC COERCION: Such actions are often inconsistently applied, sometimes resumed, and sometimes just halted, the Presidential Office spokeswoman said The government backs healthy and orderly cross-strait exchanges, but such arrangements should not be made with political conditions attached and never be used as leverage for political maneuvering or partisan agendas, Presidential Office spokeswoman Karen Kuo (郭雅慧) said yesterday. Kuo made the remarks after China earlier in the day announced 10 new “incentive measures” for Taiwan, following a landmark meeting between Chinese President Xi Jinping (習近平) and Chinese Nationalist Party (KMT) Chairwoman Cheng Li-wun (鄭麗文) in Beijing on Friday. The measures, unveiled by China’s Xinhua news agency, include plans to resume individual travel by residents of Shanghai and China’s Fujian
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