Today afternoon, just twenty minutes ago, Ministry of Commerce (MOFCOM) promulgated its decision regarding the concentration between The Coca-Cola Company and China Huiyuan Juice Group Limited, which prohibited this acquisition. This prohibition decision is the first prohibition decision issued by MOFCOM since the enforcement of Chinese Anti-monopoly Law (AML).
On September 3, 2008, The Coca-Cola Company announced its intention to make cash offers to purchase China Huiyuan Juice Group Limited; a Hong Kong listed company which owns the Huiyuan juice business throughout China.


The Coca-Cola business in Chinese drink market has been operating since the reform of Chinese market and is well known for its famous sparkling beverage brands such as Coca-Cola, Sprite and Fanta. In the last few years, the Company has also introduced a number of still beverage brands, including Guo Li Chen (Minute Maid Pulpy) and Yuan Ye (Original Leaf Tea). In line with this, the Company is seeking to further develop its beverage business through this acquisition.
President and CEO of The Coca-Cola Company told press:


"This acquisition will deliver value to our shareholders and provide a unique opportunity to strengthen our business in China, especially since the juice segment is so dynamic and fast growing in China. It is also further evidence of our deep commitment to China and to providing Chinese consumers with the beverage choices that meet their needs."


This decision is astonishing news to the parties of concentration and Chinese profession circle as well. Just on 16th, March 2009, China Daily reported that Mr. Yao, the spokesman of MOFCOM , said Monday that Coca-Cola’s bid to acquire China Huiyuan Juice Group was still being reviewed, with reference to an anti-monopoly law that took effect last year.Yao told reporters that the ministry’s investigation and review of the proposed transaction, which started November 20, would finish on March 20.Coca-Cola applied for an anti-trust exemption at the end of 2008. The acquisition would be the first major deal concluded under China’s new anti-monopoly law.That law was passed in 2007 and took effect on August 1, 2008.Yao said the MOC would consider whether the acquisition would disturb market competition or harm rival enterprises or consumers.

I thought the prohibition decision should be related to high concentration degree in the relevant market, high market share of two parties and the final decision on the relevant market.