Boparan Holdings is considering a disposal of its Avana Bakeries’ Christmas puddings business to mitigate competition concerns raised by the Office of Fair Trading following the acquisition from Premier Foods.
Boparan, which acquired the Matthew Walker Christmas puddings business following its takeover of Northern Foods, acquired Avana Bakeries from Premier Foods in December in a £30m deal, which also saw it take on the chilled goods business RF Brookes.
The OFT is considering undertakings offered by Boparan Holdings to sell the Christmas pudding business to remedy competition concerns. It said the merger would bring together the two largest suppliers of Christmas puddings who together accounted for the vast majority of UK supply, representing over £40m a year, despite their seasonality. Customers raised significant concerns that, due to the seasonal demand for Christmas puds, the merger might result in price increases, it added.
The company is “considering its options” to mitigate the concerns. “We believe that the OFT has failed to understand the very competitive dynamics of the own-label market. We will now consider our options to deal with the OFT’s findings in respect of Avana Christmas puddings,” a statement said.
Meanwhile, Boparan’s 2 Sisters Food Group business has posted a 10.2% increase in like-for-like sales to £559.7m for the 13 weeks to 28 January, excluding the acquisition of Brookes Avana.
Strong sales growth was driven by its poultry division thanks to new business wins, and chilled volumes were buoyed by its seasonal sandwich and ready meal products. Goodfella’s had delivered “encouraging results” following its latest pizza campaign and the company would be focusing on increasing repeat rates this year, it said.
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