Earlier this month the Competition and Market Authority (CMA) raised concerns that the merger could raise prices for certain juice drinks that use a special aseptic production process.
Refresco has now offered to sell a factory in Nelson, Lancashire, which is Cott’s only UK-based facility to use the process.
The CMA has accepted the offer in principle and has until 14 March to decide whether to accept Refresco’s proposed undertakings or refer the merger for an in-depth investigation.
Aseptic juice process
Refresco announced its agreement to acquire Cott’s bottling activities for $1.25bn in July last year, creating the largest independent bottler for retailers and A-brands in Europe and North America with a combined production volume of approximately 12 billion liters.
It has already received clearance from US and Canadian regulatory authorities.
The CMA’s initial investigation into the merger did not find any competition concerns for the majority of the companies’ products.
However, both companies supply juice drinks using a particular aseptic production process, which allows them to be sold preservative-free and without refrigeration. As only one other competitor in the UK currently supplies third parties with juice drinks using this production process, the CMA raised concerned that the combined business might be able to increase prices or lower quality standards in this area.
In the UK, Refresco produces these drinks in a factory in Bridgwater and Cott produces them in its Nelson, Lancashire facility. Refresco says it will sell the latter to a purchaser approved by the CMA.