By staff reporter Liang Dongmei 

(Caijing.com.cn) China’s rejection of the Coke-Huiyuan deal is based on market principles and had no political motivation, commerce ministry spokesman Yao Jian told Caijing in a telephone interview on March 20. 

The decision to block Coca-Cola’s US$2.4 billion takeover of Huiyuan Juice Group, China’s largest juice producer, represents “the first time that a professional unit (within the commerce ministry), using professional methods, made a market-based decision.”

The March 18 ruling was the first major test of China’s anti-monopoly law, which came into force on August 1, 2008, enacted as a condition of China’s entry into the World Trade Organization. The law contains exceptions for takeover cases with national-security implications, but presented no visible hurdles to consumer-industry acquisitions.   

Yao added that the ministry’s decision was “according to law,” and based on a review of Coca-Cola’s current and potential market share after the deal. 

The commerce ministry on March 18 said the acquisition “will have a negative influence on competition.”

The U.S.-China Business Council, an organization representing around 250 U.S. companies that do business with mainland China, has since called on the commerce ministry to explain the decision’s legal basis, to provide a full understanding of the ruling and its implications for future foreign investment proposals in China.

The American Chamber of Commerce said it is disappointed that Coke’s proposed acquisition of Huiyuan was not approved by the commerce ministry. “We hope this does not have a negative impact on American companies considering future investments in China or Chinese companies considering future investments in the United States,” AmCham said in a statement. 

Full article in Chinese: http://www.caijing.com.cn/2009-03-19/110124689.html

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