But from a purely marketing perspective, it has been a sobering process. That a company with such communications expertise could mishandle what would have been its biggest overseas purchase is a reminder that both public and Government relations in China remain a minefield.
Coke, still in a post-Olympics haze when the deal was announced, seemingly failed to anticipate the negative reaction to the deal. Then, despite calling in Edelman after the backlash began, it struggled both to handle public opinion and to convince the Government the deal was worth approving. All its good work around the Olympics appeared to have been in vain. The US$2 billion investment in the market it announced earlier this month will now presumably be used to expand its presence in juices and teas organically.
Coke aside, there are major implications for all multinationals with designs on China. While the reason given for blocking the deal was competition rules, few believe that they alone can explain the decision. Beijing has prevented a large, healthy domestic brand being swallowed up by a Western corporation. It’s a striking symbol of protectionism from a country that has benefited so greatly from globalisation. It is also a sign, as our feature on page 24 discusses, that the focus is now on Eastern companies heading West rather than vice versa.
Finally, amid all the recriminations, spare a thought for Huiyuan, the juice company at the centre of it all. It can no longer look forward to the benefits of the deal - basically Coke’s muscle - but it will have to live with the backlash it has created. And it will ultimately face an extra competitor when Coke does manage to expand its juice business.
