French bakery giant Cérélia’s takeover of Jus-Rol could lead to a jump in prices for shoppers and a lowering in quality, the UK deal’s watchdog has warned this morning.
The Competition & Markets Authority (CMA) raised its concerns following a three-month phase 1 investigation into the deal launched in February.
Cérélia, which is buying Jus-Rol as part of a wider acquisition to take over General Mills’ European dough business, is the largest manufacturer of bake-at-home dough products in the UK, making private label goods for some of the biggest supermarkets.
The CMA highlighted that Jus-Rol was the best-selling brand in the bake-at-home dough category and faced few branded rivals for its products, which include puff and shortcrust pastry dough, pizza dough and pain au chocolat dough.
Together, the businesses are the two leading suppliers of bake-at-home dough products to supermarkets and other grocery retailers and account for more than two-thirds of sales to shoppers in the UK.
The watchdog’s investigation found that, prior to the merger, Jus-Rol branded products competed against private label products supplied by Cérélia for space on supermarket shelves.
Following the deal, Cérélia would produce and sell both the Jus-Rol products and private label products, leaving retailers with fewer alternatives.
The CMA said it was concerned the loss of the Jus-Rol business as an independent player could lead to increased prices to grocery retailers – and ultimately consumers – and lower quality products.
Sorcha O’Carroll, senior director of mergers at the CMA, added: “Millions of people across the UK regularly use bake-at-home dough products, whether to rustle up a mid-week pizza for dinner or to make breakfast pastries for their families on the weekend.
“Consumers should know they’re getting value for money and not overpaying for their grocery products, especially as the current cost-of-living crisis stretches people’s budget even further.
“That’s why we won’t hesitate to refer this investigation further if our concerns aren’t addressed.”
Cérélia has five working days to submit proposals to address the CMA’s concerns.
If suitable proposals are not submitted, the CMA will progress to an in-depth phase 2 investigation.
Cérélia agreed a deal with General Mills to takeover the division in November last year. The transaction - for an undisclosed sum - included the branded and private label dough businesses in the UK and Ireland and Germany, with the Knack & Back and Jus-Rol brands part of the acquisition.
It is part of General Mills’ ‘Accelerate’ strategy to streamline the group and focus on high-growth brands sucn as Old El Paso, Häagen-Dazs and Nature Valley.
Cérélia is a market leader in the dough category, with a presence in more than 50 countries annual revenues of almost €500m and 1,600 employees across ten production facilities in France, Belgium, the UK, the Netherlands, Canada and the US. It makes a line-up of pie and pizza dough, pancakes and cookies and owns a number of brands, including English bay, Abra-Ca-Debora, Jan, Pop Bakery and Croustipate.
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