Nearly all future mergers would be permitted.
• Under current AT enforcement guidelines, might this decision be reconsidered?.
No. The approval of both mergers would have increased the HHI by 893 points to 3,266. Today, any merger resulting in an HHI over 2000 is presumed likely to result in anti-competitive behavior.
• What does this imply as to the relative strength of economic (efficiency) forces versus political (equity) considerations over time?.
Political agendas concerning equity generally tend to override efficiency considerations. .
DISCUSSION.
The two mergers proposed by soft drink giants, Coca-Cola and PepsiCo, were in violation of the existing US Anti-Trust laws. In rejecting both potential acquisitions, the FTC set an important precedent for anti-trust cases. Many believe that if the FTC allowed these mergers, nearly all future merger proposals would be approved.
The FTC chose to disallow the mergers on the grounds that the market would become excessively concentrated. Using the Herfindahl-Hirshman Index (HHI) as a guideline, the mergers exceeded the approved limits. A merger with a post market concentration above 1800) is likely to be challenged (providing the merger partners have market shares that cause the HHI to rise by more than 100). The merger between Coke and Dr. Pepper would have resulted in an HHI increase of 548. The merger between Pepsi and Seven Up would have increased the HHI by 345 points. If both mergers were approved the HHI would have increased by 893 points to 3,266. .
These numbers are way above what the HHI Guideline determined to be an acceptable level. Even without the merger the HHI was 2373; a number well above the 1800 mark. This may be in large part due the Soft Drink Interband Competition Act of 1980. This act protected companies from certain aspects of the anti-trust laws. Each merger in and of itself created cause for concern.
Control of market share is the key issue in this case study. ... Pepsi has always taken the lead in developing new products, but Coke soon learned their lesson and started to do the same. ... In the foreign markets, Coke has been more successful than Pepsi. ... However, in certain countries that allow direct comparison, Pepsi has beat Coke. ... In some cases the products have been successful. ...
Also Pepsi and Coke are two companies, which have become recognizable to the average consumer in the US. ... Since Pepsi and Coke control a large share of distribution, new competitors may have to rely on Pepsi and Coke to distribute their product. ... Both Pepsi and Coke have non-CSD products such as Gatorade (Pepsi) in the sports drink market, Dasani (Coke) in the bottled water market and Tropicana (Pepsi) in the multi-juice market. ... In addition Pepsi and Coke have excellent promotional strategies as they use identifiable celebrities such as Britney Spears (Pepsi) and Harry Potter (Coke) ...
Coke vs Pepsi Fighting for Foreign Markets Introduction The soft-drink battleground has now turned toward new overseas markets. ... Both Coca-Cola, which sold 10 billion cases of soft-drinks in 1992, and Pepsi now find themselves asking, "Where will sales of the next 10 billion cases come from?" ... Coke and Pepsi in Russia: In 1972, Pepsi signed an agreement with the Soviet Union which made it the first Western product to be sold to consumers in Russia. ... Coke and Pepsi in Romania: Romania is the second largest central European market after Poland, and this makes it a hot battlegr...
Coke vs. ... Both Coca-Cola, which sold 10 billion cases of soft drinks in 1992, and Pepsi now find themselves asking, "Where will sales of the next 10 billion cases come from?" ... Coke and Pepsi in Russia: In 1972, Pepsi signed an agreement with the Soviet Union, which made it the first Western product to be sold to consumers in Russia. ... Coke and Pepsi in Romania: Romania is the second largest central European market after Poland, and this makes it a hot battleground for Coca-Cola and Pepsi. ... Coca-Cola is closing in on Pepsi's lead in this country with 1992 sales of 19.5 mi...
This article takes a look at Coke's Powerade vs. Pepsi's Gatorade and how Coke plans on reviving their struggling product. ... While Coke is implementing many new ways to get their product to the consumer, Pepsi still remains to be the leader in the industry. Pepsi claims, "We"re going to watch Powerade closely and see how they do." ... Pepsi believe they, "know and understand the athlete better than anyone on the planet." ...
Coke vs Pepsi Fighting for Foreign Markets Introduction The soft-drink battleground has now turned toward new overseas markets. ... Both Coca-Cola, which sold 10 billion cases of soft-drinks in 1992, and Pepsi now find themselves asking, "Where will sales of the next 10 billion cases come from?" ... Coke and Pepsi in Russia: In 1972, Pepsi signed an agreement with the Soviet Union which made it the first Western product to be sold to consumers in Russia. ... Coke and Pepsi in Romania: Romania is the second largest central European market after Poland, and this makes it a hot battlegr...
For example, Coke had sweetened its traditional formula in Japan to compete with sweeter-tasting Pepsi. ... Like any company, Coke wants to make money. ... Coke wants to double Luanda's 33 Coke drinks per capita a year. ... Profits dropped, increased competition from Pepsi Co. and management inefficiencies, economic crisis in Asia, antitrust issues in Europe, product-safety mess in Belgium were the primary problems experienced by the company. ... Coke operates in a segmented capital market. ...
For example, Coke had sweetened its traditional formula in Japan to compete with sweeter-tasting Pepsi. ... Like any company, Coke wants to make money. ... Coke wants to double Luanda's 33 Coke drinks per capita a year. ... Profits dropped, increased competition from Pepsi Co. and management inefficiencies, economic crisis in Asia, antitrust issues in Europe, product-safety mess in Belgium were the primary problems experienced by the company. ... Coke operates in a segmented capital market. ...
Pepsi-Cola or Coca-Cola? ... Pepsi and Coca-Cola both have very distinct flavors. ... I think that Pepsi is more for people who like very sweet drinks and that Coca-Cola has a more relaxed and kick back feel to it than Pepsi. ... Pibb, Vanilla Coke=Pepsi Vanilla, Pepsi Twist=Coke with Lemon, 7up=Sprite. ... Pepsi and Coca-Cola are so different yet so similar. ...
