Sugar prices could rise due to Tate & Lyle Sugars deal with Tereos, CMA finds

By William Dodds

- Last updated on GMT

The CMA is concerned that the deal with reduce competition in the sugar market. Credit: Getty / Andrii Shablovskyi
The CMA is concerned that the deal with reduce competition in the sugar market. Credit: Getty / Andrii Shablovskyi

Related tags Regulation

The Competition and Markets Authority (CMA) has found that the acquisition of Tereos UK & Ireland (TUKI) by Tate & Lyle Sugars (TLS) could lead to higher sugar prices.

Following an initial Phase 1 investigation, the CMA has found that the purchase of TUKI’s business to consumer packed sugar operation could lead to a substantial lessening of competition.

TLS and Tereos have been given until 15 March to offer solutions that will fully resolve the CMA’s concerns, otherwise it will refer the deal to an in-depth Phase 2 investigation.

The deal was announced on 2 November 2023, with the CMA launching a merger review into the deal on 12 January. Financial details of the purchase were not disclosed at the time.

Currently, the two companies only face competition in the UK and Ireland from British Sugar in the supply of packed sugar to a wide range of retail and foodservice businesses. If further competition is lost from the market, this could lead to higher sugar prices in supermarkets which would negatively impact consumers.

Commenting on the findings, Sorcha O’Carroll, senior director of mergers at the CMA, 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 UK sugar sector, reducing competition and choice further for people and businesses.”

With three sites in the UK, TLS refines and distributes sugar and related products, including under the Tate and Lyle brand. It is part of the ASR Group, which purchased the business from Tate & Lyle in 2010 for £211m.

Meanwhile, TUKI business to consumer sources sugar from its Europe-based parent company, Tereos, and uses a facility in Normanton, West Yorkshire as a packing and distribution site to sell packed sugar in the UK, including under the Whitworths brand.

In other news, Rooster’s Brewing Co has announced the acquisition of fellow Harrogate beer maker Daleside Brewery.

Related topics Legal Supply Chain

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