Hardly totally a logistics story but with tremendous logistics long term effects. It has all happened so quickly.
Less than a fortnight ago, Coca-Cola executives were cutting a ribbon on a new $90m innovation and technology centre in Shanghai, having just pledged to invest $2 billion in China — more than last year’s total capital spending — by 2012.
The Ministry of Commerce thought otherwise.
Exit Coca Cola pursued by bear. It teaches two things. If Beijing says ‘no’ you are stuffed. All the plans and flow charts and case flow are as but the trembling of a butterfly’s wings — and as effective. Beijing says no. You are still stuffed.
China never really wanted a formal competition regime in the first place. It was a condition of joining the World Trade Organisation in 2001 that China introduced some kind of legislation; it did so last August, producing a law that bears only a passing resemblance to international norms.
Article 7 introduces the strange concept of a ‘lifeline of the national economy’ to be protected as a matter of ‘national security’.
The Financial Times suggests that article 31 devolve powers of approval to other bodies ‘if state security is involved’. You could, at a stretch, take the implication Coke would leverage its dominance in fizzy drinks to become a one-stop shop for retailers.
Is it protectionism? Yes.
Will the rest of the world squeal? Yes.
Will China be full of Coca Cola trucks carrying out their logistical errands?
Technically, China formally rejected Coca-Cola’s proposed $2.4bn takeover of the country’s leading juice maker on competition grounds. At a guess the same thing is going to happen to Rio Tinto. Which will make the logistics marketing situation interesting to say the least and blows a great hole in the country’s revamped anti-monopoly regime that was given extra teeth last August.
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