Though not of course in the food sector, the decision today by the Chinese Ministry of Commerce to block Coca-Cola Co.'s attempted acquisition of China Huiyuan Juice Group has implications for any FMCG company looking to invest in the country.

Coke had bid a staggering US$2.4bn for Huiyuan, which controls some 40% of the pure juice market in the country. Combined Coke and Huiyuan would have around 20% of the total juice market.

This, the Ministry of Commerce said, was enough to block the deal over concerns Coke would be in a position to raise soft drink prices to the detriment of consumers. On top of this the Chinese government has expressed fears that Coke could leverage its position as a global soft drinks giant in order to market bundles of soft drinks products and demand exclusive dealing requirements with retailers that could squeeze out smaller rivals.

China's critics, however, have been quick out the blocks. They see the move as nothing but a protectionist and political one, aimed at keeping an important Chinese brand in Chinese hands and quelling a groundswell of anti-US sentiment that had bubbled up around the deal.

"In the Chinese government's view, Chinese industries are mostly still weak and they don't want to have foreign companies come in and buy them all out," one Beijing based lawyer was quoted saying today.

The Chinese Ministry of Commerce, however, has been at pains to stress that it is not  institutionally protectionist. It said that it had ruled on 24 cases since the Anti-Monopoly Law was launched in August 2008 before the Coke case.

"Among those, 23 cases were approved without any conditions; for the one that would have excluded and restricted competition, the Ministry talked with the applicant, and the applicant provided a solution for reducing restrictions on competition and made promises, for which the Ministry finally approved the deal with a restrictive condition of reducing unfavourable impacts on competition," the statement said.

In all fairness this could be seen as a borderline case and whilst some will argue that this was undoubtedly a political decision, others will be able to point to fairly strong evidence of the legality, on an international level, of the ruling.

"You cannot say that this objection is not justified because the acquisition itself does form a large monopoly threat," Qian Weiqing, a senior partner at Dacheng Law Firm in Beijing, was quoted in the international press saying this morning. "I think this deal shows that China's legal environment is getting closer to that in the international market," he added. "It is quite common for such deals to be rejected globally, and this is just business."

That said, the ruling is likely to have huge international ramifications and many Western commentators have already taken it to mean that the Ministry of Commerce is going to take a very tough line on foreign acquisitions of leading Chinese brands - although this doesn't necessarily differentiate it from some Western powers, such as France.

It also means other major international businesses - and not just those in food and drinks - will be far more cautious about investing in takeovers in the country, even when they are priced at such a rich premium as this one.

The Chinese will also no doubt be accused of double standards, with Chinese companies looking to invest overseas whilst the government blocks similar moves by multinationals on home soil.

These critics too have a point.  A 20% share of the juice market is not necessarily prohibitive to competition, particularly in a market as fast growing and as dynamic as China, and particularly in context of the wider food and drinks market.

The question here for the future is not whether the decision was necessarily right or wrong - as it can be argued either way - but what were the real motivations behind the decision - consumer rights or national protectionism and political self interest?

If it is the later, you can't help but agree with another commentator who said today: "This is a daft ruling. Frankly, if Coke can't acquire a bloody juice company in China then we can kiss goodbye to other companies trying to do M&A in China."