Coca-Cola decision was reasonable
May 09, 2009 | BY
clpstaff &clp articles &Web-seminar listeners say Mofcom must provide more detailed statements
The regulator's decision in Coca-Cola's attempted takeover of Huiyuan Juice is “reasonably fair”, according to many practitioners, but significant fears of protectionism remain.
A live poll conducted by China Law & Practice during a recent web-seminar on the topic of China merger-control enforcement found that over 40% of listeners felt generally positive about the Chinese Ministry of Commerce's decision to block the takeover. But 39% said there was “not enough justification provided by Mofcom”, and 14% said it was “overly-protectionist”.
Commenting on the Coca-Cola decision and the poll results, Pinsent Masons senior associate Simon Sorockyj said that regulators should look at decisions such as these on an individual case basis, and that some protection of national interests was being exercised.
“If it wasn't being based on foreign versus local interests then you wouldn't have arrived at that decision,” he said.
“Those kinds of reasoning don't encourage business to see that the competition principles will actually be properly applied by Mofcom.”
But the web-seminar poll results do show that Mofcom is listening to and learning from public feedback, and that its approach is gaining more respect.
“Compared with other decisions, the [one] in Coca-Cola is very detailed,” said Zhan Hao of Grandall Legal Group, adding that he expected to see further improvement in this area in future.
Lawyers acknowledge that improvement has already been seen in Mofcom's reasoning in its recent decision on Mitsubishi Rayon's acquisition of Lucite. There, its statement was considerably longer and provided more transparency as to its thinking.
Over 100 people listened to the web-seminar on April 29. Those attending included PRC counsel, private practice lawyers and academics from as far away as Argentina, Australia and the US, as well as regional in-house counsel.
More China Law & Practice web-seminars are planned in the next few months – check www.chinalawandpractice.com/webseminars for more details and free registration.
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