Dixons founder takes stake in drinks group eyeing Coke

Lord Kalms, the founder of Dixons, is taking a stake in a fledgling soft drinks company that has designs on rivalling Coca-Cola and PepsiCo in Europe.

Acorn Brands, a start-up drinks business, is embarking on a €100m acquisition spree with funds provided by the Fleming family's private equity vehicle.

Fleming Family & Partners has taken a minority stake in Acorn Brands, which owns the Oja 100 orange juice brand sold in Asda and Carrefour. Lord Kalms has joined the drinks company as its chairman.

Brendan Harris, a former Coca-Cola executive who led Permira's abortive buyout for Cadbury Schweppes' European drinks arm, is running Acorn Brands. He said there was "no upper ceiling" on the size of rivals on his shopping list. He refused to rule out a bid for Britvic, the struggling soft drinks business that is worth about £400m.

All types of non-alcoholic drinks are contenders for Acorn Brands' portfolio, from sugary carbonates to trendy fruit smoothies, Mr Harris said. "We want to get quite big, quite quickly. We want to become the third force in European beverages behind the red and blue bottling systems," he added.

Acorn Brands is preparing to launch a second drinks brand later this year. Its most recent accounts, from 1 October 2004 to 31 December 2005, show it made a £217,046 loss on £185,580 of sales.

Lord Kalms has kept a low profile since bowing out of Dixons in 2004. He retains the honorary title of life president of the electricals retailer now known as DSG International. He also chairs Volvere, an AIM-listed investment vehicle.

The European soft drinks market is worth £100bn a year - 40 per cent of which is controlled by Coca-Cola and PepsiCo.