The Court of Appeal has fully dismissed a legal challenge from Cérélia over its acquisition of Jus-Rol, ruling in favour of the Competition & Markets Authority (CMA).
It upheld the Competition Appeal Tribunal’s (CAT) finding that the CMA was ‘rational and fair’ in its merger review, which had said that the deal would substantially lessen competition and put UK grocers at risk of higher prices and lower quality products – it noted this could ultimately be passed on to shoppers.
Cérélia first announced its intentions to buy Jus-Rol from General Mills in late 2021 and has faced an uphill battle since then. In January 2023, the CMA concluded its investigation resulting in the above findings. Disagreeing with the results, Cérélia issued a legal challenge which was dismissed by CAT last September, but the French headquartered-firm appealed again.
Now, in a unanimous decision, the Court of Appeal has dismissed all five grounds of Cérélia’s appeal, which challenged the CAT’s conclusions on the CMA’s assessment of competition arising from two alternative suppliers of ready-to-bake items to grocery retailers in the UK. Cérélia also raised procedural challenges in relation to the processes followed by the CMA in its investigation.
“We are pleased with today’s ruling from the Court of Appeal, which has fully dismissed all five grounds of Cérélia’s appeal, upholding the CMA’s decision which found that the Cérélia / Jus Rol merger would substantially lessen competition,” said Joel Bamford, executive director of mergers at the CMA.
“The Court of Appeal found that the CAT’s conclusions were correct, that the CMA conducted a rational and fair investigation and the processes followed by the CMA were lawful.
“This is the second time Cérélia has been unsuccessful with its legal challenge, first in the CAT and now, in the Court of Appeal. It must now sell off Jus-Rol in its entirety to ensure UK grocers and shoppers don’t face higher prices or worse quality products,” Bamford added.
The CMA said Cérélia had already given final undertakings to sell the Jus-Rol business, but this process was suspended pending the outcome of the appeal.
Cérélia seeks appeal via Supreme Court
However, BakeAway – the UK arm of Cérélia – said it is seeking to appeal to the Supreme Court, meaning no steps will be taken to commence the sale process pending the resolution of that by the Supreme Court.
BakeAway maintains that the transaction will create a more innovative product market for UK consumers and a more price competitive category. It also hopes the Supreme Court will ‘consider the important issues that arise regarding the CMA’s powers and conduct of merger investigations’.
“We’re very disappointed with the dismissal by the Court of Appeal and still believe that the pastry and dough category is in desperate need of innovation and investment,” said BakeAway managing director Jan Boers.
“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.”
BakeAway was acquired by Cérélia in 2016, with the business building a brand-new 92,500 sq ft factory four years later in Corby, Northamptonshire, out of which it supplies own-label pastry and dough products to grocery retailers.
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