Dough-makers’ merger risks raising price of home-cook pastries
‘Consumers should know they’re getting value for money and not overpaying for their grocery products’
THE merger of two dough-makers risks pushing up the price of cook-at-home pastries and pizzas if it goes ahead, the competition watchdog has warned.
The Competition and Markets Authority is threatening to start an indepth investigation into Cérélia’s takeover of Jus-rol, a deal which would see the UK’S largest manufacturer of bakeat-home dough items snap up the bestselling brand in the country.
Together, Cérélia and Jus-rol account for more than two thirds of the sales of items such as puff and shortcrust pastry dough and ready-to-bake pains au chocolat in supermarkets.
Retailers would be left “with fewer alternatives” if the deal is allowed to progress, meaning potentially higher prices and worse quality, the CMA warned.
Sorcha O’carroll, senior director of mergers for the CMA, said: “Consumers should know they’re getting value for money and not overpaying for their grocery products, especially as the current cost of living crisis stretches people’s budget even further. That’s why we won’t hesitate to refer this investigation further if our concerns aren’t addressed.”
The CMA said the pair had five days to lay out their proposals to address its concerns. If they do not, the deal, which was announced last November, will progress to an in-depth investigation, which could result in it being blocked.
Cérélia did not respond to requests for comment. The French company makes almost €500m (£426m) in revenues every year, and sells in 50 countries. As well as being one of the largest makes of own-brand dough products for supermarkets, it also owns brands including English Bay Bakery and Abraca-debora pancakes.
The move comes amid growing concerns over squeezed household budgets, with some products already 20pc more expensive than they were in December.
Figures released last week suggested that more than a fifth of Britons were struggling to make ends meet, as their energy and fuel costs also surge. As well as raising prices for customers, some companies are also shrinking packet sizes but keeping prices the same – something known as shrinkflation – to cope with their own steeper costs.
The CMA is ramping up efforts to stop any businesses from taking steps that would force prices even higher for customers.
Earlier this month, the CMA’S most senior enforcer warned that the watchdog would take robust action against any businesses that were using “anticompetitive practices and transactions that unnecessarily raise prices”.
Michael Grenfell said: “We will not allow cartelists to treat the current economic circumstances as an excuse for anti-competitive collusion that makes things worse for consumers.”