March 24 (Bloomberg) -- China’s Ministry of Commerce defended its decision to block Coca-Cola Co.’s bid for the country’s biggest domestic juice maker and denied the decision was aimed at protecting a national brand.

Coca-Cola’s acquisition of China Huiyuan Juice Group Ltd. would have hurt competition by strengthening its control of China’s juice and beverage market and enabling it to abuse its dominance, the ministry said in a statement on its Web site, providing its first detailed explanation of its decision.

The ruling had raised concern China may be using a new anti-monopoly law to block foreign competition and handed ammunition to opponents of Chinese acquisitions in other countries. Australian lawmakers have begun an inquiry into foreign-investment laws amid a backlash over Chinalco’s planned investment in Rio Tinto Group.

China, the world’s biggest buyer of metals, may spend $500 billion on overseas resources investments over the next eight years to secure supplies, according to Deloitte Touche Tohmatsu.

The World Bank urged governments to resist protectionism on March 17 after finding that most Group of 20 members had introduced restrictive trade practices.

The decision to block Coca-Cola’s bid for Huiyuan wasn’t influenced by nationalism, the ministry said. Acquisitions by multinational companies resulting in reduced competition would have affected China’s socioeconomic development, it said.

CEO ‘Disappointed’

Dana Bolden, a Coca-Cola spokesman, declined to comment on the ministry’s statement. In a March 18 statement, Chief Executive Officer Muhtar Kent said the company was “disappointed” by the decision.

“We put a tremendous effort into providing all the relevant materials to the Ministry of Commerce to ensure that they had all the information available and understood the transaction,” Kent said.

Coca-Cola has said it plans to invest $2 billion in China over the next three years to help win more of the nation’s 1.3 billion consumers.

The investment plan includes a $90 million technology center that opened in Shanghai March 6. Coca-Cola’s proposed investment is 25 percent more than the $1.6 billion it has spent in China since returning in 1979.

Coca-Cola fell 12 cents to $44.02 at 4 p.m. in New York Stock Exchange composite trading. The shares have declined 2.7 percent this year.

To contact the reporters on this story: William Bi in Beijing at wbi@bloomberg.net; Stephanie Wong in Hong Kong at swong139@bloomberg.net

Last Updated: March 24, 2009 16:24 EDT