French pastry maker Cérélia has been ordered to sell frozen pastry Jus-Rol after losing an appeal against the competition watchdog.
US based food company General Mills, which owns Jus-Rol, announced in November 2021 that it agreed to sell its European dough businesses to Cérélia.
With an annual turnover of €800m (£682m), Cérélia brands include Croustipate, Pop! Bakery, Jan, Abra-ca-Debora, Crêapan, English Bay Bakery and Knack und Back.
However, the Competition Market Authority launched an inquiry into the merger in early 2022. By June, the CMA referred the completed acquisition for an in-depth investigation as it expected it may cause a substantial lessening of competition within a market.
Its full report in January 2023 saw the CMA decide that this merger has a substantial lessening of competition in the wholesale supply of dough-to-bake products to grocery retailers in the UK. As a result, the CMA decided that Cérélia had to sell the entire Jus-Rol business.
Cérélia disagreed with the CMA’s decision and issued a legal challenge by appealing to the Competition Appeal Tribunal (CAT), where both parties attending a hearing in July 2023.
The CAT handed down its judgment in September of the same year, siding with the watchdog as it dismissed all grounds of Cérélia’s appeal.
The French company went on to appeal this decision to the Court of Appeal, where the parties were back for another hearing for two days in January.
However, on Thursday, the Court of Appeal, in a unanimous decision, dismissed all grounds of Cérélia’s appeal.
The CMA were “pleased” with this ruling as Joel Bamford, executive director of mergers at the CMA said “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.”
He noted that this is the second time Cérélia has been unsuccessful with its legal challenge.
“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,” he added.
The watchdog said Cérélia had already given final undertakings to sell the Jus-Rol business, but this process was suspended pending the outcome of its appeal. Following today’s judgment, the CMA now expects Cérélia to commence the sale process.