Refresco to sell specialist factory in East Lancashire to satisfy CMA concerns

Refresco has announced it will sell its aseptic PET drink production facility in Nelson, Lancashire, in order to address competition concerns raised by the UK Competition and Markets Authority (CMA) regarding the brand’s acquisition of Cott.

Of concern to the CMA was that both Cott and Refresco utilise an aseptic drink production process, which allows drinks to be sold preservative-free and be stored without refrigeration.

The CMA began an investigation into the $1.25 billion deal and found that the merger would mean only one other company in the UK would utilise this production process. This led to the CMA raising concerns that the merged brand would dominate the market and potentially have the power to increase prices and lower quality standards.

The proposed sale of the Nelson facility has been deemed an ‘adequate’ remedy by the CMA, essentially meaning the brand’s only aseptic PET site would be the brand’s Bridgwater facility.

Refresco CEO Hans Roelofs said of the outcome: “The acceptance of our remedy by the CMA is a milestone on the path to completing this transformational acquisition of Cott’s bottling activities.

“We continue to fully cooperate with the CMA and to search for a suitable buyer in order to deliver on the required remedies. We will now focus on the next steps to completion and look forward to creating the world’s largest independent bottler with leadership positions across Europe and North America.”

Jerry Fowden, CEO of Cott, commented: “We are excited to move forward in this process.

“With Refresco announcing their expectation to close on the transaction at the end of January, we will soon have a much stronger balance sheet and we can fully dedicate our focus on the growth and expansion of our route based services business in water, coffee, tea and filtration solutions.”