Ready-to-bake products – including staples such as shortcrust and
puff pastry, pizza and patisserie dough – are found in all major
grocery retailers, with UK consumers spending over £100 million
each year on these products. Jus-Rol is by far the largest
supplier of branded ready-to-bake products in the UK, while
Cérélia is the largest supplier of own-brand ready-to-bake
products, making these items on behalf of some of the nation’s
largest grocery retailers.
The Competition and Markets Authority (CMA) launched an in-depth
review into the deal in June 2022 after an initial Phase 1
investigation identified possible competition concerns. Over the
past 5 months, an independent CMA panel has analysed a wide range
of evidence from Cérélia and Jus-Rol, grocery retailers and other
industry players in order to fully understand the market, as well
as the potential impact of the deal.
The CMA’s investigation has provisionally found that the merger
brings together what are the 2 leading suppliers in the market by
a considerable margin. Ready-to-bake items supplied by Cérélia
and Jus-Rol account for nearly two-thirds of all such products
sold in the UK.
While there are differences between the companies’ products, the
evidence gathered by the CMA shows that Jus-Rol products compete
with grocery retailers’ own-brand products supplied by Cérélia
for the same space on many supermarket shelves. Evidence from
grocery retailers shows that they consider the companies’
products to be important alternatives to one another – in
particular because there are few alternative suppliers of either
branded or own-brand products. Grocery retailers also told the
CMA that their ability to trade off Jus-Rol and Cérélia when
purchasing these products enables them to get a better deal for
customers.
The CMA’s investigation provisionally found that the 2 businesses
face very limited competition, with all other suppliers being far
smaller, and many lacking the capabilities held by the merging
businesses. The CMA also provisionally found it is unlikely that
any supplier would enter the market, or expand its existing
activities, to address the loss of competition brought about by
the deal.
On this basis, the CMA has provisionally concluded that the deal
would substantially lessen competition. This would risk UK
grocers facing higher prices and lower quality products, which
could ultimately be passed on to their customers.
Margot Daly, chair of the independent inquiry group carrying out
the Phase 2 investigation, said:
Food prices are already increasing, which makes it important that
we don’t allow a lack of competition to make the situation worse.
Jus-Rol and Cérélia are by far the largest suppliers in the
ready-to-bake sector and the competition that takes place between
them helps grocers to give shoppers the best possible deals.
Today’s decision is provisional, and we will now consult on our
findings and listen to any further views before reaching a final
decision.
The CMA welcomes responses from interested parties to its
provisional findings by 25 November 2022 and its notice of
possible remedies, which sets out potential options for
addressing its provisional concerns, by 18 November 2022. These
will be considered ahead of the CMA issuing its final report,
which is due by 24 January 2023.
Notes to editors
- For more information, visit the Cérélia / Jus-Rol merger
inquiry page.
- The CMA provisionally found that the merger would lead to a
Substantial Lessening of Competition (SLC) in the following
market: the wholesale supply of dough-to-bake (DTB) products to
retailers in the UK.
- Cérélia refers to Cérélia Group Holding SAS (either directly
or through entities under its common ownership or common control
or over which it exerts material influence within the meaning of
section 26 of the Enterprise Act 2002 (the Act).
