Introduction

　　China''s Anti-Monopoly Law, the foundation stone of the market economy, started to be implemented since August 1st 2008. After half a year of investigation, Coca Cola''s acquisition of Huiyuan Juice was put to a stop by Ministry of Commerce on March 18th 2009. It became the first abortive case since the implementation of the Anti-Monopoly Law and caused strong repercussions home and abroad. While the nationalists applauded for the decision, overseas media generally took a skeptical attitude, considering it as a case of trade protectionism. This phenomenon requires a rational interpretation and guidance for the domestic and international media. On the one hand, acquisition by foreign capital may bring advanced technology and management experience and promote economic development; on the other hand, it may lead to the monopoly of relevant market, hamper competition and cause some domestic brands to disappear. I maintain we should look at Coca Cola''s acquisition of Huiyuan Juice from two aspects. There are both advantages and disadvantages in acquisition. Anti-monopoly law enforcement agency should not only pay attention to the damage to competition brought about by acquisition, but also to its positive role in promoting economic development. It should balance the pros and cons so that it can reach a rational conclusion and maintain the authority of law. I think the society should take a balanced attitude to acquisition by foreign capital, and prevent nationalism to go spread unchecked. I also hope that the international media should not overreact to this case, which could become the excuse for other countries to practice trade protectionism. The Chinese government simply made a misleading yet not wrong decision at a wrong place in a wrong time.

　　1．The case of Coca-Cola''s acquisition over Huiyuan Juice

　　On September 3, 2008, Huiyuan Juice Group Co., Ltd. （1886.HK） （"Huiyuan"）　one of the largest companies in China that produces fruits and vegetable juice, was reported that a wholly owned subsidiary of the Coca-Cola Company （the "Coca-Cola"） intended to acquire all equity interest of Huiyuan with a total amount of　 179,200,000,000 HK dollars （equals to 2.4 billion US dollars）. If this 2.4-billion- US-dollar deal can be completed, it will become the largest acquisition in the history of Chinese food and beverage industry, it will also become one of the largest acquisition cases of in China''s domestic market over the past several years.

　　The Coca-Cola has already submitted the application material to the Ministry of Commerce of the People''s Republic of China （the "Ministry of Commerce"） since September 19, after six months'' investigation, the Ministry of Commerce eventually announced the decision of prohibition. When reviewing this case regarding concentration, in light of The Anti-monopoly Law of the People''s Republic of China （the "Anti-monopoly Law"）, the Ministry of Commerce has taken the following factors into consideration: market share in the relevant market of the undertakings concerned and their ability to control the market; concentration degree of the relevant market; effect on the market entry and the technology improvement; effect on consumers and other companies concerned; the brand effect on the competition of the juice industry and so on. In a conclusion, Ministry of Commerce affirmed: this acquisition would have a negative impact on competition. By concentration, it is possible that Coca-Cola Company may take advantage of its dominant market position in the carbonated soft drinks to bundle fruit juice drinks, or to set other exclusive set of transaction terms so as to restrain the competition of fruit juice drinks market, resulting that consumers may be forced to accept products of higher prices and fewer types. In the meantime, due to the restrictions to the market entry of the existing brand, it is less likely for the potential competition to eliminate the effect of restriction. Additionally, the concentration will squeeze the living space of the small and medium-sized enterprises and bring some negative impact on the competition pattern of the juice industry. In order to reduce the negative effects on competition, the Ministry of Commerce has subsequently conducted a negotiation with the Coca-Cola in regards to the additional restrictive conditions, requesting the Coca-Cola to put forward workable solutions. The Coca-Cola expressed its own views about the issues raised by the Ministry of Commerce and put forward some initial solutions and the modified proposal. After assessment, the Ministry of Commerce concluded that the revised proposal was still ineffective in reducing the negative effects on competition after the concentration. As a result, the Ministry of Commerce made the decision of prohibition in accordance with Article 28 of the Anti-monopoly Law. Shortly afterwards, it aroused extensive discussions and a variety of voices, among which the attitude of the foreign media was particularly worth pondering. The major financial media, such as The Wall Street Journal, Reuters, Financial Times, the Associated Press, Bloomberg, almost took up the same stance, saying this is a conduct of trade protectionism. The Ministry of Commerce and the Ministry of Foreign Affairs both made an announcement not to accept this accusation. This case, China''s first antitrust acquisition has soon provoked much discussion in the international and domestic world.