The Australian Competition & Consumer Commission (ACCC) said it opposed a revised plan to sell the brands to Coca-Cola on the grounds that it would substantially lessen market competition. It turned down the initial plan in March.

Coca-Cola said the company is considering its options following the ACCC ruling and hasn't decided on whether to abandon all attempts at buying the local brands, a spokesman said.

Cadbury Schweppes officials have declined to comment until after the company's parent has seen the ruling. Coca-Cola's plan to buy Cadbury Schweppes's brands, originally valued at $1.85 billion, was scaled back to around $1.1 billion after the sale ran into regulatory obstacles in several countries. Most European Union member states have been dropped from the plan, along with Norway andSwitzerland.

Although Coca-Cola and Cadbury Schweppes could go ahead with the sale in Australia and fight the ACCC in court, that isn't likely to happen, said John O'Connell, an analyst at Macquarie Equities Ltd. He added that a third attempt at wooing the ACCC isn't likely either.

The revised proposal didn't address the concerns it had expressed with the first plan, the ACCC said.

``The merger would result in a market structure where the leading carbonated drinks in almost every category will be controlled by Coke,'' said ACCC chairman Alan Fels. That, in turn, would increase the likelihood of an increase in prices, he added.

Under the revised plan, Coca-Cola was to buy the major brands of Schweppes -- Dr Pepper and Canada Dry -- with the intention of licensing the production, sale and distribution rights to Coca-Cola Amatil Ltd, its 43 per cent-owned Australian unit.

In addition, Coca-Cola Amatil was to sell all of its carbonated soft drinks brands not licensed from its parent to CadburySchweppes Australia. Those brands, which include Kirks, Halls and Deep Spring, would have supplemented a suite of brands to be retained by Cadbury Schweppes, leaving the size of that company's business ``essentially unchanged,'' according to Coca-Cola.

But with Schweppes in its portfolio, Coca-Cola's share of the Australian carbonated soft drink market would have increased several percentage points from the current 65 per cent.

Second-tier brands have limited sales in outlets like convenience stores, and wouldn't likely get the refrigerator or shelf space that Cadbury Schweppes currently enjoys, the ACCC said.

The Wall Street Journal