The UK Competition and Markets Authority (CMA) has raised concerns over Refresco’s proposal to purchase Cott’s worldwide beverage manufacturing business for $1.25bn.

Refresco and Cott manufacture a wide range of soft drinks, which are distributed to well-known brands, supermarkets and shops. The firms also use a special aseptic production process that means their products can be sold without added preservatives or refrigeration.

There is currently only one other competitor in the UK that uses this aseptic production process and supplies drinks to third parties in this way. Therefore, the CMA has raised concerns that Refresco and Cott might be able to actively increase prices or lower quality standards for their products if the merger went ahead.

“The CMA has raised concerns that Refresco and Cott might be able to actively increase prices or lower quality standards.”

CMA acting executive director Rachel Merelie said: “These companies supply well-known UK shops and brands with soft drinks, who in turn sell these to thousands of people daily. It is therefore important that we address any issues to ensure that shoppers do not lose out.

“We have looked at all aspects of this merger and have concerns that it could lead to reduced competition in the manufacturing and packaging of certain juice drinks. This may result in higher prices or quality standards slipping for stores and brands, with potential knock-on effects to end-consumers.”

The CMA will refer the case for an in-depth investigation unless Refresco offers acceptable undertakings to address competition concerns.