The CMA said it is proposing to accept the remedies offered, including the sale of a UK viennoiserie business and two French production facilities, following its investigation into Vandemoortele’s deal to buy Délifrance.
It had concerns that the deal could have led to higher costs for supermarkets and commercial foodservice customers.
Vandemoortele and Délifrance each supply frozen viennoiserie products such as croissants and pains au chocolat to supermarket and foodservice customers. Supermarkets and other customers bake these products in their in-house bakeries and sell or serve them to end-consumers.
The merger would lead to Vandemoortele becoming the largest supplier of frozen viennoiserie products in the UK by a “considerable margin”, the CMA said.
A Phase 1 investigation found that the deal could result in a substantial lessening of competition in the supply of these products to customers in the UK, potentially leading to higher prices for UK shoppers.
To resolve the CMA’s concerns, the businesses have offered to sell Délifrance’s UK viennoiserie business together with two production facilities in France, in Avignon and Béthune, with the capacity to supply all of the frozen viennoiserie products that Délifrance currently sells into the UK, to a purchaser to be approved by the CMA.
Having considered this proposal, the CMA said it believes it could resolve its competition concerns and will consult on the remedies package and the potential purchaser in due course.
Sorcha O’Carroll, Senior Director for Mergers at the CMA, said: “Our initial investigation found that this deal could have led to higher prices or reduced quality for supermarkets and foodservice customers across the UK, so we welcome steps taken by the businesses to address our concerns.
“By offering to sell the relevant Délifrance UK business together with two production facilities to an approved purchaser, we believe this will protect choice and maintain quality, helping ease the pressure on businesses and the households they serve.”
Meanwhile, the CMA revealed it has launched the first phase of an investigation into the Associate British Foods purchase of rival brand Hovis.
