Friday, 05, March, 2021

The Anti-Corruption Agency has studied letters from business owners and users of social networks about violations of the law in the process of privatization of Coca-Cola Ichimligi Uzbekiston, Ltd. We are talking about a call for bids for the sale of 57.118% of the government’s stake in the largest producer of soft drinks in Uzbekistan.

The findings of the analysis showed that some of the requirements for bidders sharply cut the number of bidders eligible to participate and implicitly create conditions for corruption.

According to the agency, the tender criteria are "excessively high", and the requirements - unreasonable. The department explained that "this leads to an artificial limitation of the number of bidders."

"A drastic limitation of the number of possible bidders may lead to a lack of competition among the small number of bidders able to fulfill the conditions of the tender, and the resulting low price for the state’s stake, which could seriously undermine Uzbekistan’s economic interests," the agency said in a statement.

Based on this, the Anti-Corruption Agency sent a submission to the relevant departments. In particular, the State Commission for Tendering in the sale of state-owned property is required to suspend the process due to the lack of equal conditions.

In addition, the department indicated to carry out efforts to soften the terms of the tender based on the conclusions of international financial and legal consultants to attract more participants to the tender and create equal opportunities for them.

What do we know about the privatization of Coca-Cola Uzbekistan

According to the State Owned Assets Management Agency, the company is the largest producer of soft drinks in Uzbekistan with a market share of approximately 47% in 2019. The announcement of the sale of a government’s stake in the amount of 57.118% in the Coca-Cola Bottlers Uzbekistan was published by the State Asset Management Agency in December last year. Among the criteria for bidding were:

  • experience of at least 7 years in the production and sale of soft drinks;
  • the ability and willingness to invest in the company to achieve long-term growth of the country's business and economy;
  • compliance with US federal laws, including, but not limited to, the Foreign Corrupt Practices Act, sanctions regulations, and the absence of criminal proceedings or investigations against the company, management, shareholders, and board members;
  • and others.

At the end of December, Deputy Prime Minister Jamshid Kuchkarov reported that Uzbekistan could start negotiations with a company willing to pay US$ 70 million. In early January, it became known that Turkish Coca Cola İçecek submitted a bid to participate in the tender. The company said that they meet all the requirements.

Recently, the Xabar.uz publication published a letter appeal from the Uzbek company Hydrolife Bottlers, sent to the Antimonopoly Committee. The document notes that the manufacturer is ready to offer US$ 150 million for the purchase of the state’s stake in Coca-Cola Uzbekistan, but is not eligible to bid due to the "conditions of the tender." Another company, Perfect Shine Energetic, applied to the Anti-Corruption Agency with a similar letter.

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