UK competition authority raises concerns over sugar supplier acquisition by T&L Sugars Limited and Tereos
12 Mar 2024 --- In a recent development that has stirred the UK’s sugar industry, concerns have emerged regarding potential price hikes following a proposed acquisition by T&L Sugars Limited (TLS), the company behind the Tate & Lyle brand. The Competition and Markets Authority (CMA) is investigating the deal to prevent what could cause an impact on consumer prices and market competition.
The potential deal involves two major players in the UK sugar market. TLS refines and distributes sugar and related products, including under the Tate & Lyle brand, to a spectrum of businesses ranging from supermarkets to hotels and cafes.
Following the CMA’s initial investigation findings, a spokesperson from TLS tells Food Ingredients First: “We will be absorbing the CMA feedback over the next few days and deciding how to progress from there.”
TUKI B2C, operating under the Whitworths brand, among others, packages and distributes sugar from its Normanton, West Yorkshire facility in England, sourcing sugar from Tereos.
In a statement from TUKI’s Corporate Communications Department, the company tells us: “On 2 November 2023, Tereos announced that it had reached an agreement to sell its TUKI production site in Normanton, West Yorkshire, and its B2C activities to TLS.”
“Tereos takes note of the decision of the CMA in the UK issued on 8 March 2024 and is currently assessing its implications.”
Regulatory scrutiny
The CMA’s concerns stem from TLS’s intention to acquire the “business to consumer” packed sugar division of Tereos UK & Ireland (TUKI B2C) from its parent company, Tereos SCA. The regulatory body fears that this deal could lessen competition within the sector, thereby potentially increasing the price of sugar for end consumers.
Following a Phase 1 investigation, the CMA has expressed its concerns, highlighting that the merger would consolidate a portion of the market.
“The supply of sugar to grocery retailers in the UK is already highly concentrated. This deal would bring together two of the three players in the UK sugar sector, reducing competition and choice further for people and businesses,” says Sorcha O’Carroll, senior director of mergers at the CMA.
“It’s now up to TLS and Tereos to find a way to address our competition concerns to avoid the deal being referred to an in-depth phase 2 investigation.”
CMA has given TLS and Tereos a chance to propose solutions that could address these competition concerns adequately.
Failing this, the authority warns of an in-depth Phase 2 investigation, which could potentially derail the acquisition. The focus of the CMA’s scrutiny is to ensure that the industry competition remains balanced, preventing scenarios where supermarkets, and ultimately consumers, face higher prices for packed sugar products.
By Sichong Wang
