The UK’s competition watchdog has referred Dairy Crest’s sale of cheese maker Millway to local peer Long Clawson Dairy over concerns it may hit competition in the supply of Stilton.
Go deeper with GlobalData
The Office of Fair Trading has referred the GBP3.5m (US$6.1m) deal, which was agreed in July, to the UK’s Competition Commission.
The OFT noted that the UK’s six largest supermarket chains are collectively responsible for 90% of the country’s GBP65m (US$112.78m) annual sales of Stilton. These retailers have always awarded mainstream supply contracts for standard and mature Stilton to only three large-scale producers – the two merging parties and Tuxford and Tebbutt, the competition watchdog said.
The merger gives Long Clawson over 50% of UK Stilton sales.
The OFT rejected the argument that the purchasing power of the supermarkets meant that consumers would not be harmed by the merger.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData“The OFT has doubts that the bargaining power of the supermarkets would prevent a rise in wholesale and retail prices in this instance,” the regulator said.
The OFT therefore referred the merger on to the Competition Commission for further investigation.
“It is a bit early to say what the likely consequences of the referral will be,” a spokesperson for the OFT told just-food. “The Competition Commission will take into account our reasons for referring the merger to them and conduct their own investigation.”
