Following an initial Phase 1 investigation, the Competition and Markets Authority (CMA) has found that T&L Sugars Limited's (TLS) purchase of Tereos UK & Ireland's 'business to consumer' packed sugar business (TUKI B2C) from Tereos SCA (Tereos), could lead to a substantial lessening of competition. TLS and Tereos now have 5 working days to offer solutions which fully resolve the CMA's competition concerns, otherwise it will refer the deal to an in-depth Phase 2 investigation.
TLS is a sugar producer which refines and distributes sugar and related products, including under the Tate and Lyle brand, to supermarkets and other businesses such as grocery wholesalers, hotels, and cafes in the UK. TUKI B2C sources sugar from its Europe-based parent company, Tereos, and uses a facility in Normanton (West Yorkshire) as a packing and distribution site to sell packed sugar in the UK, including under the Whitworths brand.
These two companies only face competition from one other company, British Sugar, in the supply of packed sugar to a range of businesses, including supermarkets. The loss of competition from the deal could lead to supermarkets paying more for packed sugar and shoppers could see higher prices for packs of sugar on shelves as a result.
Sorcha O'Carroll, Senior Director of Mergers at the CMA, said:
The supply of sugar to grocery retailers in the UK is already highly concentrated. This deal would bring together two of the three players in the UK sugar sector, reducing competition and choice further for people and businesses.
It's now up to TLS and Tereos to find a way to address our competition concerns to avoid the deal being referred to an in-depth Phase 2 investigation.
