Vandemoortele Required to Sell UK Plant Following Pastry Merger Investigation

• Vandemoortele required to sell its laminated dough production facility in Worcester and UK sales operations in Staines-upon-Thames.
• CMA's decision preserves an independent source of supply and restores competition in the UK frozen viennoiserie products market.
• The merger would have led to Vandemoortele becoming the largest supplier, substantially reducing competition and potentially resulting in higher prices or lower quality for businesses and consumers.
• The CMA's investigation was conducted under its 4Ps framework, which aims to ensure efficient investigations while addressing competition concerns.

The transfer of Vandemoortele’s UK sales operations to an independent operator will protect competition and help keep prices in check for consumers.

The Competition and Markets Authority (CMA) has concluded its investigation into Vandemoortele's acquisition of Délifrance, a merger that raised concerns about the preservation of competition in the UK frozen viennoiserie products market. The CMA's independent inquiry group assessed evidence and found that the merger would lead to Vandemoortele becoming the largest supplier of these products, substantially reducing competition and potentially resulting in higher prices or lower quality for businesses and consumers. After Vandemoortele conceded that the merger led to a substantial lessening of competition, the inquiry group streamlined its investigation and engaged with the businesses earlier than usual to find an effective solution. The CMA's decision requires Vandemoortele to sell its laminated dough production facility in Worcester and its UK sales operations in Staines-upon-Thames to a suitable purchaser, preserving an independent source of supply and restoring competition.

The CMA's investigation was conducted under the 4Ps framework (pace, predictability, proportionality, and process), which aims to ensure that investigations are carried out efficiently while still addressing competition concerns. The framework allows for constructive engagement with businesses to find effective solutions, as seen in this case where Vandemoortele conceded to competition concerns early on. This approach enables the CMA to conclude investigations ahead of statutory deadlines, as was the case here, where the decision was made almost 7 weeks before the 24-week deadline. The CMA's framework is designed to balance pace and predictability with proportionality and process, ensuring that investigations are carried out in a fair and effective manner.

The CMA's decision has significant implications for the UK food industry, particularly regarding the preservation of competition in wholesale markets. The transfer of Vandemoortele's UK sales operations to an independent operator will protect competition and help keep prices in check for consumers. This outcome is crucial in markets like frozen pastry products, which are sold to everyday shoppers in cafés and supermarket bakeries. Compliance officers should be aware that companies may need to divest assets or transfer operations to address competition concerns, as seen in this case. The CMA's decision sets a precedent for future mergers and acquisitions in the UK food industry, highlighting the importance of preserving competition in wholesale markets.

Lawyers should note that the CMA's decision may have implications for future mergers and acquisitions in the UK food industry, particularly with regards to preserving competition in wholesale markets. Compliance officers should be aware of the potential need for companies to divest assets or transfer operations to independent operators in order to address competition concerns.

Source: Original reporting via GOV.UK