CHINESE COMPETITION authorities this week decided that Coke and orange juice make a lousy cocktail.

Beijing insists its decision to reject Coke’s bid for the country’s biggest juice company, Huiyuan Juice, was not a protectionist move, but already there are murmurings the move could harm the country’s ambitious merger and acquisition plans abroad.

The ministry of commerce said the deal, which would have been the biggest foreign takeover ever, violated China’s anti-trust law, which took effect in August 2008. The decision came as a surprise, as most had believed the generous deal would be approved after Coca-Cola pledged to invest a further €1.5 billion into the Chinese economy.

“No, I’m not worried,” vice-commerce minister Chen Jian told a briefing in Beijing, when asked if the ruling could lead to other countries blocking Chinese investment. “We made our decision based on our anti-monopoly law.

“Other countries have their laws and regulations which they will follow.” The ruling is being read in some quarters as a sign that rising economic nationalism in China is translating into a tougher operating environment, and other countries could retaliate.

Soon after the news that Chinese anti-trust authorities had blocked the Huiyuan sale, Barnaby Joyce, an Australian opposition senator who has pushed for a review of foreign investment laws, said the move supports his campaign to block a €15 billion Chinese investment in Australian miner Rio Tinto.

There are fears that China is using provisions in the new anti-trust legislation which allow it to consider China’s national economic development and the protection of well-known brands.

The commerce ministry, which had been reviewing the deal since November, denied this.