The competition watchdog has said it might block a tie between two major sugar companies if they cannot prove the deal won’t lead to higher prices for shoppers.
The Competition and Markets Authority (CMA) has said competition in the market could be harmed by a deal of the maker of the Tate and Lyle brand to buy the owner of the Whitworths sugar, Tereos UK and Ireland.
T and L Sugars Limited announced the deal to buy the UK packing and distribution site and ‘business-to-consumer’ activities from Tereos UK and Ireland last November.
Sorcha O’Carroll, Senior Director of Mergers at the CMA, said: “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.”
“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,” she added.
The watchdog said the two companies only face competition from one other company, British Sugar, in the supply of packed sugar to a range of businesses, including supermarkets.
“The loss of competition from the deal could lead to supermarkets paying more for packed sugar and shoppers could see higher prices for packs of sugar on shelves as a result,” it added.