The Competition and Markets Authority (CMA) has found that Cerelia’s purchase of bake-at-home dough brand Jus-Rol may lead to higher prices and lower quality products.
Cerelia, which is the biggest manufacturer of bake-at-home dough products in the UK, produce own brand products for some of the largest grocery retailers.
Combined with Jus-Rol, the brands are the two leading suppliers of bake-at-home dough products to retailer and constitute two thirds of sales of the products in the UK.
The CMA’s investigation revealed that prior to the merger, Jus-Rol branded products competed against private label products supplied by Cerelia for space on supermarket shelves.
Jus-Rol is also the best-selling brand in the bake-at-home dough category and faces few branded rivals.
“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 in a statement.
“The CMA is therefore concerned that 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.”
CMA senior director of mergers Sorcha O’Carroll 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.”
Currently, Cerelia has five working days to submit proposals to address the CMA’s concerns. If suitable proposals aren’t submitted, the CMA are expected to move to a phase 2 investigation.