The UK Competition and Markets Authority (CMA) has identified potential competition concerns following its provisional findings into BakeAway’s acquisition of Jus-Rol.
Within its findings, the CMA has said retailers could face higher prices as a result of the acquisition, however the Corby-based company owned by Cérélia claims these provisional findings fail to reflect how competition works in the grocery market, saying it contains material errors of assessment.
BakeAway, which currently produces the Jus-Rol product range said that its rationale for acquiring the frozen pastry manufacturer is to reinvigorate the brand through investment and product innovation in a bid to bring more choice to shoppers.
Commenting on the findings which were published today (4 November), BakeAway managing director, Jan Boers said that the company was “deeply disappointed” with the results and that if this was to be confirmed in a final decision, “would negatively impact the UK grocery sector.”
BakeAway claims that prohibiting the acquisition would deprive UK consumers of the benefits that would come from an expanded category with more innovation and that in the long-term, this is “affecting its value, blocking much needed investment into growth, and depriving shoppers of the benefits of important investment and innovation in the home baking segment.”
BakeAway’s acquisition of Jus-Rol also aims to significantly grow the the UK pastry category to be comparable in size to continental European markets where dough products have notably higher market penetration.
“BakeAway competes in the market alongside large and highly efficient European contract manufacturers, as well as several strong UK suppliers. The CMA’s provisional decision underestimates the strength of these competitors.”
The investigation which is being carried out by an independent inquiry group published its findings today and its chair, Margot Daly added: “Food prices are already increasing, which makes it important that we don’t allow a lack of competition to make the situation worse.
“Jus-Rol and Cérélia are by far the largest suppliers in the ready-to-bake sector and the competition that takes place between them helps grocers to give shoppers the best possible deals. Today’s decision is provisional, and we will now consult on our findings and listen to any further views before reaching a final decision.”
