Cadbury concerned by PepsiCo's Quaker deal

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Related tags: Federal trade commission, Cadbury schweppes, Pepsico

The British beverage and confectionery group, Cadbury Schweppes,
has warned the US Federal Trade Commission that the proposed US$
13.3bn acquisition...

The British beverage and confectionery group, Cadbury Schweppes, has warned the US Federal Trade Commission that the proposed US$ 13.3bn acquisition of Quaker Oats by PepsiCo could lead to rivals being shut out of retail outlets, reports the Financial Times. The US Federal Trade Commission is in the early stages of deciding whether to block the Quaker transaction, which was announced in December. Coca-Cola, which wanted to buy Quaker until its board vetoed the move, is also thought to have raised concerns. Cadbury Schweppes owns Dr Pepper and 7 Up in the US. It also owns Snapple, Schweppes and Canada Dry. Unwilling to antagonise its rival, it had kept a low profile until required to comment by the commission. Through the acquisition of Quaker Oats, PepsiCo would add Gatorade sports drink to its range of beverage. Gatorade has an 80 per cent share of the sports drink market. PepsiCo's products also include Tropicana orange juice, SoBe drinks and Frito Lay chips. Tom Pirko, a beverage industry consultant, said: "The idea is that the more power PepsiCo assumes, the tougher they will play the game. Smaller beverage companies could be shoved aside, retailer deals put together that nobody else can do . . . basically, screening everyone else out so that, ultimately, you have higher prices."​ On May 31, Cadbury Schweppes claimed underlying profits for the first half should produce double-digit growth as expected, despite continued weakness in the UK confectionery market. Source: Financial Times

Related topics: Market Trends

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