The acquisition of Kerry Foods’ savoury pastry business by pie-maker Pork Farms is to be investigated by the Competition and Marketing Authorities (CMA).
The CMA stated that, as a result of the merger, there was a “realistic prospect” that there would be a “substantial lessening” of competition in the pork pie and pastry market.
Pork Farms acquired the chilled savoury pastries division of Kerry Foods in August this year, both of which supply supermarkets with own-label snacks.
The organisation said the transaction would be referred for an in-depth investigation unless Pork Farms offered acceptable undertakings to address the competition concerns in a clear-cut manner.
It said it was concerned that a lessening of competition could result in higher prices and a reduction in choice or quality for consumers.
Andrea Coscelli, executive director markets & mergers at the CMA, said: “These are very popular products which are currently produced by a small number of manufacturers. This merger will further reduce the choice available to retailers and consumers and may give the merged company the ability to raise prices or reduce the quality of these products.
“Unless Pork Farms offers undertakings that resolve these concerns, we think it is necessary to investigate the merger in greater detail to see whether it could harm consumers’ interests.”
Pork Farms: "disappointed"
A Pork Farms spokesman said: “We are obviously disappointed with the CMA’s decision to refer the transaction to a phase two review.
“A key rationale behind the creation of the new group is its enhanced ability to provide increased investment behind the markets we operate in to provide greater choice, quality and value to our customers and consumers as well as new opportunities for our employees.
“We continue to believe that the transaction will provide our customers with a streamlined, more responsive and better invested supply chain, reflecting the increasingly competitive retail landscape that we are seeing in today’s markets as consumers’ shopping habits change. Quality, choice, service and value have always been at the core of our business and this remains the case.
“We will continue to work closely with the CMA in relation to the transaction to ensure that it has all necessary information to inform the review process.”