Greencore's proposed purchase of rival Bakkavor will create one of the UK's largest convenience food businesses.
The Competition and Markets Authority (CMA) is proposing to accept remedies offered following its investigation into Greencore Group's deal to buy Bakkavor Group.
Greencore is a major food manufacturer, supplier and distributor which is dedicated to the production and supply of convenience food in the UK. Bakkavor is a multinational manufacturer and supplier of fresh prepared foods across the UK, Ireland and the US.
Both businesses sell their products to supermarkets and grocery retailers such as Tesco, Marks & Spencer, Sainsbury's, Waitrose and Asda.
A Phase 1 investigation by the CMA found that the deal could result in a substantial lessening of competition in the supply of own-label chilled sauces - such as pasta and stir-fry sauces - which could lead to higher prices for UK shoppers and/or a reduction in product quality.
To resolve the CMA's concerns, the businesses have offered to sell Greencore's only chilled sauce and soups manufacturing plant in Bristol. Having considered this proposal, the CMA believes it could resolve its competition concerns and will consult on the composition of the remedies package and the potential purchaser in due course.
Joel Bamford, Executive Director of Mergers at the CMA, said:
The cost of our weekly shop matters to us all, so we must take decisions that ensure there is effective competition helping to keep product prices as low as possible on supermarket shelves. Our assessment found Greencore's deal to buy Bakkavor could raise prices at the till.
Following close engagement with Greencore and Bakkavor we've secured remedies which we believe have the potential to address our competition concerns - so we have accepted the remedies in principle today and will now work to towards a final resolution.
