Tate & Lyle’s parent company has been given five working days to “offer solutions” amid concerns that sugar prices will rise following its recent acquisition of Tereos UK & Ireland.
The warning comes after the Competition and Markets Authority (CMA) raised concerns that the deal could reduce competition and raise sugar prices for UK shoppers, warning that it would escalate the investigation if a solution was not found.
Initial investigations by the UK regulatory body found that the purchase of the business “could lead to a substantial lessening of competition”.
T&L Sugars Limited operates the Tate and Lyle brand, as well as supplying supermarkets and other independent businesses such as grocery wholesalers, hotels, and cafés. Tereos owns the Whitworths brand.
The watchdog cautioned that these two companies already only face competition from one other company, British Sugar, meaning the deal could lead to a loss of competition.
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This would leave supermarkets vulnerable to “paying more for packed sugar”, while consumers could also face higher prices, the CMA added.
CMA senior director of mergers Sorcha O’Carroll said: “The supply of sugar to grocery retailers in the UK is already highly concentrated. This deal would bring together two of the three players in the sector, reducing competition and choice further for people and businesses.”
She added that it was up to the two companies to “find a way to address our competition concerns to avoid the deal being referred to an in-depth Phase 2 investigation.”
A spokesperson for T&L Sugars said: “We will be absorbing the CMA feedback over the next few days and deciding how to progress from there.”
