Sector News

Sausage ruling: top savoury snack makers set to merge

April 22, 2015
Food & Drink
Two of Britain’s biggest pork pie and sausage roll suppliers are hopeful they will be free to earn their crust together after the competition authorities provisionally cleared their merger.
 
Pork Farms looks likely to get the final go-ahead to take a bigger slice of the UK’s £1bn chilled savoury pastry market after the interim report on its acquisition of the chilled savoury pastries division of Kerry Foods.
 
As both supply supermarkets with own-label snacks, the Competition and Markets Authority (CMA) has been chewing over the meaty merger since the start of the year for fear it could push up the prices of pies, pasties and slices.
 
However, the watchdog’s four cold savoury pastry investigators provisionally concluded on Tuesday that the merged bakers did not make all the pies and there were enough other suppliers to keep prices down.
 
The merger was not expected to substantially cut competition, the CMA said.
 
John Wotton, the chair of CMA’s group investigating the merger, said: “We have provisionally concluded that the merger will not give the parties an opportunity to raise prices or reduce quality. The evidence we heard indicated that the merger would not significantly affect customers’ ability to negotiate for the best deal for these products.”
 
He suggested other players in the pork pie market were agile enough to fill any supply gaps.
 
“If necessary, customers such as retailers and wholesalers could switch to available alternative suppliers and we found that there was sufficient capacity, either currently available or which could be quickly brought into play, to allow customers to switch suppliers.”
 
Pork Farms, which makes its own branded pies as well as snacks for retailers such as Asda and Sainsbury’s, said it was waiting for the final competition ruling to be served. A decision is due by 21 June.
 
Chris Peters, the managing director of Pork Farms, said: “We are very pleased with the CMA’s provisional conclusion that the merger has not resulted, and may not be expected to result, in a substantial lessening of competition.
 
“However, we are aware these findings are currently provisional and that we are still subject to the interim order, which requires us to continue to hold the acquired businesses separate.”
 
By Katie Allen
 
Source: The Guardian

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