The provisional takeover of Dairy Crest’s milk division by Müller has entered a second period of investigation after the UK’s Competition and Markets Authority (CMA) posited that the move "gives rise to a realistic prospect of a substantial lessening of competition in the supply of fresh milk to major grocery retailers with national scope," thegrocer.co.uk reports.
Müller and Dairy Crest have been given five working days from 12 June to explicate the particulars of the £80 million deal. The CMA will then spend five days examining the document, and decide whether the acquisition is tenable.
Sheldon Mills, the senior director of mergers at the CMA, said, "The CMA is aware of the very significant challenges the UK dairy sector is currently facing. These challenges are recognised in the framework which we used to assess the merger. However, the CMA found that the transaction may nevertheless give rise to competition concerns, since it removes the rivalry between the two main suppliers of fresh milk to major grocery retailers in certain parts of Great Britain.”
Ronald Kers, CEO of Müller, stated, "It was our expectation that the CMA might wish to examine our proposed acquisition in detail and we look forward to working with them to supply the information required and to achieving a positive outcome.
"The rationale for this transaction is perhaps even stronger now given the mounting challenges facing the UK fresh milk sector and we remain convinced of the need to increase our competitiveness, ensuring that customers continue to receive a quality product at a low price, whilst continuing to pay farmers fairly."
© 2015 European Supermarket Magazine – your source for the latest retail news. Article by Peter Donnelly.
