Vandemoortele has conceded that its acquisition of bakery peer Délifrance could lessen competition in the supply of frozen laminated-dough products in the UK.
In a statement today (15 May), the UK’s Competition and Markets Authority said Vandemoortele had notified the watchdog that it accepts the deal “may be expected to result in a substantial lessening of competition” for retail and foodservice customers, reflecting concerns raised during the CMA’s Phase 1 investigation.
The regulator said the concern relates to “horizontal unilateral effects” in the supply of frozen laminated-dough products.
The CMA said it has accepted Vandemoortele’s so-called SLC concession and will continue its investigation on that basis.
Last month, CMA referred the transaction for an in-depth Phase 2 probe after concluding the Belgium business had failed to resolve its competition concerns.
First announced in March last year, the deal had raised competition concerns in the UK and the EU, with Vandemoortele pledging in December to sell two Délifrance plants in France to secure clearance.
To get the acquisition approved by competition authorities, the family-owned group committed to dispose of the pair of frozen laminated-dough facilities in Avignon in the south of France and Béthune in the north.
While the European Commission provisionally approved the deal in December on those conditions, a buyer has not yet materialised.
Explaining the conclusions from its initial probe in April, the CMA said it “found that the merger could lead to Vandemoortele becoming the largest supplier of frozen viennoiserie products in the UK by a considerable margin and could substantially affect competition in the supply of these products, potentially leading to higher prices or lower quality for customers in the UK”.
When the deal was announced, Vandemoortele said the combination with Délifrance would create a €2.4bn ($2.6bn) bakery group, providing “solutions to retail and foodservice partners”.
Délifrance operates 14 production facilities, employs more than 3,200 staff and supplies retail and out-of-home customers across Europe and in Asia.
Vandemoortele has 28 manufacturing plants and 3,500 workers.
The company’s frozen bakery brands include Lizzi, Banquet d’Or and Lanterna, while the business also produces for private-label clients. It supplies markets in Europe and the US.
“Vandemoortele concedes Délifrance deal could hit UK competition, watchdog says” was originally created and published by Just Food, a GlobalData owned brand.
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