The takeover of Jus-Rol by a rival pastry manufacturer could lead to higher prices and lower quality, the competition watchdog has warned.
The Competition and Markets Authority (CMA) has raised concerns over a potential decrease in competition due to Cerelia’s acquisition of Jus-Rol from US food giant General Mills.
Cerelia, the largest producer of bake-at-home products in the UK, agreed the deal last year for an undisclosed amount.
The CMA said the two firms represent two-thirds of the UK market, with products made by the two businesses being key competitors for space on supermarket shelves.
Following the deal, Cerelia will produce and sell both Jus-Rol products and its own private label products for supermarkets, which the CMA said will leave “retailers with fewer alternatives”.
The watchdog added: “The CMA is therefore concerned that the loss of the Jus-Rol business as an independent player could lead to increased prices to grocery retailers – and ultimately consumers – and lower quality products.”
It has called on the firms to submit proposals to address the competition concerns in the next five days or risk a more thorough Phase 2 investigation, which could ultimately lead to the deal being halted.
Sorcha O’Carroll, senior director of mergers, said: “Millions of people across the UK regularly use bake-at-home dough products, whether to rustle up a midweek pizza for dinner or to make breakfast pastries for their families on the weekend.
“Consumers should know they’re getting value for money and not overpaying for their grocery products, especially as the current cost-of-living crisis stretches people’s budget even further.
“That’s why we won’t hesitate to refer this investigation further if our concerns aren’t addressed.”