The Competition Commission has invited comments by August 15 on the proposed £155m merger between Danish dairy group Arla and Express Dairies.
The deal would create Arla Foods and reduce the number of milk suppliers from four to three. The new company would then becomes the UK’s biggest fresh milk supplier with 38% of the market.
The CC said it wants to explore whether the reduction in the number of major suppliers from four to three would cause a substantial lessening of competition in supply to national supermarkets. And if the supermarkets would retain buyer power through spare capacity in fresh milk processing, expansion by existing suppliers and own label sales facilitating switching suppliers.
It will also consider if there could be a lessening of competition in supply to middle ground and doorstep customers in all or any part of GB.
Plus the effect on competition in the supply of processed milk could have consequences for farm-gate prices, wholesale prices and or quality.
And finally whether a merger would bring about efficiency improvements which could not be achieved if the deal did not go ahead and if those savings would be passed onto customers and the final consumer.
Any deal between Arla and Express will be on hold until the CC delivers its report on September 24, 2003.
The deal would create Arla Foods and reduce the number of milk suppliers from four to three. The new company would then becomes the UK’s biggest fresh milk supplier with 38% of the market.
The CC said it wants to explore whether the reduction in the number of major suppliers from four to three would cause a substantial lessening of competition in supply to national supermarkets. And if the supermarkets would retain buyer power through spare capacity in fresh milk processing, expansion by existing suppliers and own label sales facilitating switching suppliers.
It will also consider if there could be a lessening of competition in supply to middle ground and doorstep customers in all or any part of GB.
Plus the effect on competition in the supply of processed milk could have consequences for farm-gate prices, wholesale prices and or quality.
And finally whether a merger would bring about efficiency improvements which could not be achieved if the deal did not go ahead and if those savings would be passed onto customers and the final consumer.
Any deal between Arla and Express will be on hold until the CC delivers its report on September 24, 2003.
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