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Watchdog gives green light to Britvic merger

PUBLISHED: 12:09 11 June 2013 | UPDATED: 12:09 11 June 2013

General views around the Robinsons soft drinks factory at Carrow Works, Norwich
Robinsons Fruit Shoot production line

Picture: James Bass
For: EDP BUSINESS
EDP Pics © 2007    Tel: (01603) 772434

General views around the Robinsons soft drinks factory at Carrow Works, Norwich Robinsons Fruit Shoot production line Picture: James Bass For: EDP BUSINESS EDP Pics © 2007 Tel: (01603) 772434

Archant Norfolk Photographic © 2007

A soft drinks merger of Robinsons and Irn-Bru was backed by the competition watchdog yesterday - four months after the deal went flat.

The Competition Commission said the brands owned by Britvic and AG Barr were not close competitors and consumers would not lose out.

But the planned £1.4bn tie-up lapsed in February because of delays caused by the Office of Fair Trading’s decision to refer the matter to the Commission.

The two companies continued to work on gaining regulatory approval but Britvic indicated yesterday that a fresh agreement was far from certain.

It comes as Britvic recently announced that its Norfolk operation would not be axed as part of a major restructuring project which could see two of its factories close, sparking 400 job losses.

The group confirmed that its Norwich factory, which employs 270 people at Carrow Works, would be left unscathed amid plans to cut costs by £30m over the next three years.

Chairman Gerald Corbett said: “Our company is in a different place to last summer when the terms of the merger were agreed.

“The cost savings from merging are less, we are performing better, we have new management and we have a new strategy to deliver good growth internationally, as well as in the UK.”

Yesterday’s findings from the Commission are provisional and the two companies are barred from announcing a new merger until the final report in late July.

Hertfordshire-based Britvic, whose brands include Robinsons, Fruit Shoot, R Whites and Tango, has around 3,000 staff.

In February, the OFT’s decision to refer the merger drew an angry response from Mr Corbett, who said at the time: “If this is industrial policy, I am a Frenchman.

“This is about two British companies getting together to take on Coca-Cola. The winners today are cracking open bottles of champagne at Coca-Cola in Atlanta, Georgia.”

Irn-Bru owner AG Barr also makes Tizer and Rubicon. The company, which is based at North Lanarkshire and has more than 1,000 employees, has produced Irn-Bru from a secret recipe for more than 130 years.

Retail sales of soft drinks in the UK amounted to £11.2bn last year and Commission deputy chairman Alasdair Smith said that, given the size of the market, it was important to examine the likely effects of the merger.

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