UK watchdog flags dry mix concerns in McCormick–Unilever deal

Britain’s competition watchdog has given McCormick and Unilever until November 18 to propose remedies for their planned food merger after finding that it could substantially reduce competition in dry recipe mixes and dry sauces sold to UK retailers.

The Competition and Markets Authority (CMA) said on Wednesday that the deal would combine the two largest branded suppliers in both categories. It will refer the deal for an in-depth Phase 2 investigation unless it accepts a remedy.

The CMA said Nestlé’s Maggi offers limited competition in dry recipe mixes, as does Premier Foods’ Bisto in dry sauces. Supermarket own brands also offer limited competition. The regulator said scarce shelf space and the strong position of established suppliers make it difficult for rivals to enter or expand in either category.

Colman’s sale talks

McCormick’s Schwartz and Unilever’s Colman’s both sell chili con carne recipe mixes and parsley sauce mixes, the two examples the CMA used to illustrate the markets it reviewed.

The regulator also examined mustard. McCormick sells American-style mustard under French’s, and Unilever sells English-style Colman’s and French-style Maille. The CMA found little competition between the styles, treated each as a separate market, and found no competition concerns in mustard.

Unilever told Reuters it had already put Colman’s up for sale to address potential competition concerns and that talks with buyers were progressing. Both companies said they were working with the CMA.

A US$20 billion flavor business

When the companies announced the deal in March, they put the enterprise value of Unilever Foods at US$44.8 billion. The combined business would bring Knorr and Hellmann’s together with brands including Cholula and Frank’s RedHot, with annual sales of about US$20 billion based on 2025 figures.

McCormick expects the merger to generate about US$600 million in annual cost savings, net of reinvestment, by the third year after closing. It identified procurement, manufacturing, and administrative costs as sources of savings.

The McCormick–Unilever Foods deal cleared a US antitrust hurdle on October 5, when federal regulators ended the waiting period under the Hart-Scott-Rodino Act ahead of schedule.

In its October trading update, Unilever said it expected the deal to close by mid-2027, subject to McCormick shareholder approval and regulatory clearances. The US Federal Trade Commission ended the federal antitrust waiting period early on October 5.