Pork Farms Bakery’s planned takeover of the Kerry Foods chilled savoury pastry business is set to be investigated further by the Competition and Markets Authority (CMA).
Competition watchdog the CMA found that the merger – announced this August - had a ‘realistic prospect’ of substantially lessening competition within the branded, own label and convenience segments of the supply of cold pies, sausage rolls, pasties and slices, and within own label hot pies.
Both Kerry Foods and Pork Farms Bakery are major suppliers of own-label chilled savoury pastry products. Their respective brands - Wall’s and Pork Farms - are in the top six of the category.
The acquisition is to be referred to an in-depth ‘phase two’ investigation, unless Pork Farms can take steps to address the CMA’s concerns by 24 December.
“These are very popular products which are currently produced by a small number of manufacturers,” said Andrea Coscelli, CMA executive director for markets and mergers. “This merger will further reduce the choice available to retailers and consumers and may give the merged company the ability to raise prices or reduce the quality of these products. Unless Pork Farms offers undertakings that resolve these concerns, we think it is necessary to investigate the merger in greater detail to see whether it could harm consumers’ interests.”
Pork Farms said it was disappointed with the decision. “A key rationale behind the creation of the new group is its enhanced ability to provide increased investment behind the markets we operate in to provide greater choice, quality and value to our customers and consumers as well as new opportunities for our employees,” a spokesman said. “We continue to believe the transaction will provide our customers with a streamlined, more responsive and better invested supply chain, reflecting the increasingly competitive retail landscape that we are seeing in today’s markets as consumers’ shopping habits change.”
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