Greencore's proposed purchase of rival Bakkavor will create one
of the UK's largest convenience food businesses.
The Competition and Markets Authority (CMA) is proposing to
accept remedies offered following its investigation into
Greencore Group's deal to buy Bakkavor Group.
Greencore is a major food manufacturer, supplier and distributor
which is dedicated to the production and supply of convenience
food in the UK. Bakkavor is a multinational manufacturer and
supplier of fresh prepared foods across the UK, Ireland and the
US.
Both businesses sell their products to supermarkets and grocery
retailers such as Tesco, Marks & Spencer, Sainsbury's,
Waitrose and Asda.
A Phase 1 investigation by the CMA found that the deal could
result in a substantial lessening of competition in the supply of
own-label chilled sauces – such as pasta and stir-fry
sauces – which could lead to higher prices for UK shoppers and/or
a reduction in product quality.
To resolve the CMA's concerns, the businesses have offered to
sell Greencore's only chilled sauce and soups manufacturing plant
in Bristol. Having considered this proposal, the CMA believes it
could resolve its competition concerns and will consult on the
composition of the remedies package and the potential purchaser
in due course.
Joel Bamford, Executive Director of Mergers at the CMA, said:
The cost of our weekly shop matters to us all, so we must take
decisions that ensure there is effective competition helping to
keep product prices as low as possible on supermarket shelves.
Our assessment found Greencore's deal to buy Bakkavor could raise
prices at the till.
Following close engagement with Greencore and Bakkavor we've
secured remedies which we believe have the potential to address
our competition concerns – so we have accepted the remedies in
principle today and will now work to towards a final resolution.
More information can be found on the Greencore / Bakkavor case
page.
Notes to editors:
- As part of its Phase 1 investigation, the CMA considered a
range of other product lines – including Italian chilled ready
meals and salads – but determined the deal would not likely lead
to a substantial lessening of competition in those lines.
- More detail on the remedies offered by Greencore will be
published on the case page in due course.
