‘Fizzy logic: How to measure competition between IRN BRU and Pepsi’

The Spring seminar series continues with a special mid-week edition on Wednesday 5th February, co-organised by CCP and our friends at the Norwich Business School.  The seminar sees the welcome return of Adrian Majumdar, an RBB Economics partner and CCP alumnus, who will be presenting ‘Fizzy logic: How to measure competition between IRN BRU and Pepsi‘. The seminar will take place from 13:00 in Room 2.01 of the Thomas Paine Study Centre, with Amelia Fletcher acting as discussant. An abstract for Adrian’s seminar can be found below.


In 2013, the UK Competition Commission (CC) cleared unconditionally (i.e. without remedies) a merger between AG Barr (distributors of IRN BRU) and Britvic (distributors of Pepsi). Ultimately the merger did not proceed, not least due to the OFT (the Phase I merger body) having referred the merger to the CC for a Phase II review. This presentation summarises key points of the case and compares and contrasts the approach taken by the OFT and the CC. We highlight the pros and cons of the growing role of back-of-the-envelope simulations (price pressure tests) in the UK (and now DG Competition) in merger analysis. These measures employ measures of closeness of substitution (diversion ratios) and accounting margins in simple formulae to inform the competition authority about whether or not a merger may be harmful. We ask:

• Does the OFT measure diversion ratios correctly and does the OFT place excessive weight on accounting margins at Phase I?

• What evidence on substitution patterns should count the most – price pressure tests, econometric assessment of switching, surveys, customers’ views, delisting events, advertising policies?

• Is there a role left for market definition in mergers?

Presenter Bio:

Adrian Majumdar is a Partner at RBB Economics. Prior to taking his post at RBB in April 2004, Adrian was the Deputy Director of Economics at the UK competition authority, the Office of Fair Trading (OFT).

Adrian has published widely on nearly all aspects of competition economics and is a co-author of the textbook published in 2011, UK Merger Control. Adrian is on the Advisory Board of British Institute of International and Comparative Law (BIICL) Competition Law Forum. Adrian is also a non-governmental advisor for the UK to the International Competition Network. He is a regular speaker at competition law conferences and lectures for Kings College London, where he is a Course Director of the Postgraduate Diploma/Masters in Economics for Competition Law. Adrian completed his undergraduate studies at Cambridge University and his PhD at the Centre for Competition Policy at the University of East Anglia.

Adrian has over 15 years’ experience of a wide range of competition issues covering horizontal and vertical mergers, abuse investigations, cartels, vertical agreements, market inquiries, compliance advice and litigation matters. He has advised numerous companies before the European Commission and domestic competition authorities. Adrian has experience as an expert witness in litigation cases in matters relating to the International Dispute Resolution Centre, the UK Competition Appeal Tribunal and the High Court of Justice.

While at the OFT, Adrian was the principal author of the Competition Act guidelines on Market Definition, the Assessment of Market Power and the Assessment of Conduct.

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