Following an in-depth review, the CMA has found Cérélia’s
purchase of Jus-Rol could leave UK retailers and shoppers facing
higher prices and lower quality products.
The CMA has concluded the only way to preserve the degree of
competition and choice for consumers is for the Jus-Rol business
to be sold to an independent buyer, to be approved by the CMA.
Ready-to-bake products – including staples such as shortcrust and
puff pastry, pizza and patisserie dough – are sold in all major
food retailers, with UK shoppers spending over £100 million every
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-label ready-to-bake products, making
these items on behalf of some of the nation’s largest grocery
retailers.
In June 2022, the Competition and Markets Authority (CMA)
launched an in-depth investigation into the deal after an initial
Phase 1 investigation identified possible competition concerns.
Over the past 7 months, a panel of independent CMA experts 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.
Following the publication of its provisional findings in November
2022, the CMA has today published its final decision in its
in-depth review of the deal.
That decision finds that the merger brings together the 2 leading
suppliers in the market by a considerable margin, with
ready-to-bake items supplied by Cérélia and Jus-Rol accounting
for nearly two-thirds of all such products sold to grocery
retailers in the UK.
The evidence gathered by the CMA shows that, while there are
differences between the companies’ products, Jus-Rol items
compete with supermarkets’ own-label 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 –
particularly because there are few credible alternative suppliers
of either branded or own-label products. Grocers also told the
CMA that the ability to trade off Jus-Rol against Cérélia, and
vice versa, when buying their products allows them to get a
better deal for their customers.
The CMA’s investigation found that, at present, the 2 businesses
face limited competition, with all other suppliers being far
smaller and many of them lacking the capabilities held by Cérélia
and Jus-Rol. It is also unlikely that any new supplier would
enter the market – or a present supplier expand its activities –
in a sufficiently timely way to address the loss of competition
brought about by the deal.
Given these findings, the CMA has concluded that the merger would
substantially lessen competition, putting UK grocers at risk of
higher prices and lower quality products – which could ultimately
be passed on to shoppers.
Margot Daly, chair of the independent panel of experts conducting
this Phase 2 investigation, said:
As living costs continue to rise, it’s our responsibility to make
sure that competition can play its part in delivering the best
possible deals for customers.
Cérélia and Jus-Rol are the biggest players in this market by far
and losing the competition that takes place between them could
result in customers facing higher prices and worse quality
products. Today’s decision will ensure that doesn’t happen.
For more information, visit the Cérélia / Jus-Rol merger
inquiry page.
Notes to editors
- The CMA 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 grocery
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). Cérélia is
controlled by funds affiliated with Ardian, a France-based
private equity investment company.
