pastry manufacturer will be forced to sell off a rival business after an appeal to allow the merger was blocked by a judge, the UK’s competition watchdog has said.
Cerelia, the UK’s largest producer of bake-at-home products in the UK, agreed to buy rival pastry maker Jus-Rol for an undisclosed amount in 2021.
But the UK’s Competition and Markets Authority (CMA) moved to block the deal earlier this year after finding that it would put UK grocers at risk of higher prices and lower quality products, which could be passed on to shoppers.
Cerelia must now sell off Jus-Rol in its entirety to make sure shoppers don’t face higher prices and worse quality products
Merging the two leading and similar businesses could reduce competition in the market, meaning grocers have less choice when picking deals for consumers, it ruled.
Cerelia disagreed with the CMA’s decision in January and appealed to the Competition Appeal Tribunal.
But the tribunal dismissed the legal challenge at a hearing in July, the CMA said.
Sarah Cardell, the chief executive of the CMA, said: “We welcome today’s judgment, which fully dismisses all four grounds of Cerelia’s appeal, and confirms that the CMA’s decision to block this merger was fully supported by the evidence and procedurally fair.
“Cerelia must now sell off Jus-Rol in its entirety to make sure shoppers don’t face higher prices and worse quality products.”
France-based Cerelia had suspended the process of selling the business while it awaited the outcome of its appeal.
The company, which also owns BakeAway, a dough manufacturer based in Corby in Northamptonshire, said earlier this year that it was “deeply disappointed” by the CMA’s outcome, and that it had “big plans to invest and improve” the Jus-Rol business.
On Friday Jan Boers, managing director at BakeAway said: “We’re very disappointed with the final ruling and still believe that the pastry and dough category is in desperate need of innovation and investment.
“In line with the UK government’s ambition to drive growth we purchased the Jus-Rol brand and brought production back to the UK, to the new factory we built in Corby.
“We sought to create a more innovative market offer for UK consumers and a more price competitive category by bringing together our expertise in pastry and dough and the strength of the Jus-Rol brand.
“We remain committed to those goals, and we are now considering all our options, including an appeal.”