China turns down Coke deal
Regulators in China have denied Coca-Cola's plan to buy a Chinese drink company for a couple billion dollars, saying the deal would have hurt competition. Scott Tong reports the deal was unpopular in Chinese polls.
Bottles of Coca-Cola sit on the shelves of a store in Beijing (Peter Parks/AFP/Getty Images)
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Steve Chiotakis: Regulators in China have put the kibosh on Coca-Cola's plan to buy a Chinese drink company for a couple billion dollars. From Shanghai, here's Marketplace's Scott Tong.
Scott Tong: The deal would have hurt competition and limited consumer choice. That was the view of the Ministry of Commerce in Beijing today.
Coca-Cola has made a big push into China's juice market -- it's growing faster than its soda market. And the Chinese firm it wanted to buy is dominant, too -- it has 46 percent of the pure juice sector.
Lots of Chinese may be celebrating this rejection. Polls showed the deal highly unpopular, the idea that a Chinese brand would sell out to foreigners instead of build its own empire.
David Wolf advises multinationals in Beijing:
David Wolf: They want to create national champions. They want to build brands that are powerful in China, and once they're powerful in China, turn them loose on the world. Maybe not on the U.S. tomorrow, but on the developing world, Africa places like that.
And for China, now's the time to catch up with the Big Boys while they're in recession.
If protectionism won here, it wouldn't be new. American lawmakers howled when companies from Dubai and China wanted to acquire U.S. firms. And global economists fear that foreign investment walls are going up in general.
In Shanghai, I'm Scott Tong for Marketplace.
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