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The UK competition regulator has raised the hurdles over a sugar deal between the makers of Tate & Lyle and Whitworths, giving them until next week to address its concerns that it could push up the price of sugar for British shoppers.
The Competition and Markets Authority warned on Friday that T&L Sugars’ purchase of Tereos’s unit which makes Whitworths and private label sugars could leave only two large suppliers in the UK, leading to a “substantial lessening of competition”.
With British Sugar as the only rival to T&L Sugars if the deal goes through, CMA said that supermarkets may be forced into paying more for packed sugar that could then be passed on to consumers.
“The supply of sugar to grocery retailers in the UK is already highly concentrated,” said CMA senior director of mergers Sorcha O’Carroll in a statement.
“This deal would bring together two of the three players in the UK sugar sector, reducing competition and choice further for people and businesses,” she added.
British Sugar is owned by Associated British Foods, which also owns Primark as well as brands from Twinings to Patak’s.
Tereos, a sugar co-operative based in France, announced its plan to sell the business-to-consumer arm and its Tereos UK and Ireland site in West Yorkshire to TLS in November.
The regulator has given the parties five working days to allay its concerns about the acquisition before opening an in-depth probe of the deal that could last about six months.
“We will be absorbing the CMA feedback over the next few days and deciding how to progress from there,” said TLS in response to the announcement.
Tereos said it was assessing the implications of the CMA announcement.
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